Saudi Arabia’s Public Investment Fund has entered a deal to buy a SR5.7 billion ($1.5 billion) stake in Kingdom Holding Co. from Saudi billionaire Prince Alwaleed bin Talal.

A 16.87-percent stake, representing 625 million shares of Kingdom Holding, will be transferred to the PIF, according to a bourse filing.

Upon completion of the transaction, Alwaleed bin Talal’s ownership will be reduced to 78.13 percent.

Founded in 1980, Riyadh-based Kingdom Holding is engaged in investment activities across diversified sectors.

In response to the move, the investment firm’s shares soared 8.8 percent to lead the gainers in early Sunday trading, with a share price of SR9.89 as of 10:53 a.m. Saudi time.

The Saudi sovereign wealth fund aims to more than double this growth — targeting around SR4 trillion in assets under management by 2025, with a focus on contributing billions of dollars to the Kingdom’s non-oil gross domestic product.

Several non-oil sectors have been identified as priority sectors in its diversification plan, such as housing, healthcare and financial services.

But it was tourism that saw the first major announcement from the PIF in 2021.

The fund invests outside the Kingdom as a way of bringing value to the Saudi economy. The next four years will be key for the PIF as the Kingdom draws ever nearer to 2030.

It is a key player in the Kingdom’s diversification strategy, particularly in achieving the Vision 2030 goals.

Since the approval of its new strategy in 2016, PIF has created 47 companies and generated more than 400,000 jobs directly and indirectly through their projects and ventures.

The fund reduced its ownership of US equities by 22 percent to $43.6 billion by the end of the first quarter of 2022, against $55.9 billion it held a quarter earlier.

PIF cut its stake in three companies —Visa Inc., Plug Power, and Walmart, Argaam reported, citing a filing by the US Securities and Exchange Commission.

However, it increased its holdings in Take-Two Interactive, PayPal, Alibaba, and Farfetch Ltd.

While it exited its stake in Just Eat Takeaway.com, five new investments were made by the sovereign fund in Carnival, Babylon, SIGNA Sports United NV, Meta Platforms, and Sea Ltd.

Most recently, PIF announced the launch of Saudi Coffee Co., aimed at turning Saudi coffee beans into a global product with $320 million to be invested in the next 10 years.

Kingdom Holding shares up 20% after Alwaleed bin Talal’s $1.5bn deal with PIF

The stock gained 9.5 percent to end Monday’s session at SR10.94 ($2.92), adding to a 9.9-percent gain from a day earlier.

PIF has acquired 16.87 percent, or 625 million shares, of Kingdom Holding's capital, cutting Alwaleed bin Talal’s stake to 78.13 percent.

Founded in 1980, Riyadh-based Kingdom Holding is engaged in investment activities across diversified sectors.