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Jacobs-Aramco JV Sells Stake to Saudi Sovereign Wealth Fund

Saudi Arabia's sovereign wealth fund, Public Investment Fund has purchased an ownership stake in a joint venture (JV) between Saudi Aramco and Jacobs Engineering Group JEC, as reported by Bloomberg, citing people familiar with the matter.

The JV, called Jasara Program Management Company, was formed in 2017 to provide professional program and construction management services for social infrastructure projects across the Middle East and North Africa region.

Inside the Headlines

Per the latest transaction, the sovereign wealth fund acquired a 40% interest — 30% from Aramco and 10% from Jacobs. Post transaction, Saudi Aramco and Jacobs will own respective stakes of 20% and 40% in Jasara. However, the parties declined to comment on the news and the value of the deal has not been disclosed yet.

Jacobs has been providing premium construction services in Saudi Arabia for more than 40 years. Earlier Jacobs pointed out that the JV with Saudi Aramco supports the Kingdom’s Vision 2030 program like an effective economic catalyst. The program aims at turning Saudi Arabia into a global investment powerhouse, a unique hub connecting three continents.

Saudi Aramco and Jacobs’ JV aims at offering services for various social infrastructure projects, in turn changing the social substructure of different regions in and around the country. In addition to this, the company would be creating high-skilled jobs for Saudi nations through a competitive and sustainable program.

Recently, Jacobs inked a contract from SEPCO Electric Power Construction Corporation, a wholly-owned subsidiary of PowerChina, for the Maritime Industries and Services project at Ras Al Khair in the Kingdom of Saudi Arabia.

Per the contract, the company will provide engineering services for Packages 4, 5 and 6 of the King Salman International Complex. Spanning across 4.3 square kilometers, the shipyard complex will be the largest in the region upon completion. Jacobs is entitled to deliver detailed design services for the project that comprises piers, dry-docks, ship lift, buildings, supporting infrastructure, utilities, telecommunications and security systems.

Share Price Performance

A look at Jacobs’ share price performance reveals that it has outperformed the industry so far this year. The company, which shares space with AECOM ACM, Altair Engineering Inc. ALTR and KBR, Inc. KBR in the Zacks Engineering - R and D Services industry, has gained 46.7% year to date compared with 26% growth of its industry. Efficient project execution has been driving this Zacks Rank #3 (Hold) company’s performance over the last few quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.


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