Dubai Financial Market to Acquire Nasdaq Dubai for US$ 121 Million

Borse Dubai and Nasdaq have endorsed the transaction, subject to regulatory approvals

The transaction will create a powerful capital markets hub for the GCC and the Middle East

DUBAI, December 22 2009: Dubai Financial Market, PJSC (“DFM”) announced today that it has made an offer to Borse Dubai Ltd. (“Borse Dubai”) and The Nasdaq Group Inc. (“Nasdaq”) enabling DFM to acquire 100% of Nasdaq Dubai. The aim of this transaction is to widen DFM’s asset classes for investors, to allow the company’s shareholders to benefit from the future growth of Nasdaq Dubai and to further develop closer operational links between the two exchanges. The ownership structure will create a dynamic new force in the region’s capital markets.

The offer, which has been approved by Borse Dubai and Nasdaq, is valued at US$ 121 Million and comprises US$ 102 Million in cash and 40 Million DFM shares. The transaction has been endorsed by DFM’s Board of Directors in its meeting on Monday 21st December 2009 and is subject to certain closing conditions, including the receipt of regulatory approvals.

The Board of Directors of DFM was advised by Goldman Sachs International and Al Tamimi & Company in connection with this transaction.

This transaction will bring Nasdaq into the shareholder base of DFM through a minority stake of 1% (equating to 80 Million shares, which at yesterday’s closing price had a value of US$ 41 Million). Meanwhile, Nasdaq will continue to allow Nasdaq Dubai to use its brand and technology. The Nasdaq stake in DFM will not require issuance of new shares as 40 Million shares will be transferred from DFM’s existing treasury shares and the other 40 Million shares will be purchased from Borse Dubai. The group will continue to be involved in Nasdaq Dubai, and will have representation on Nasdaq Dubai’s Board of Directors.

As per the transaction term sheet, the Parties agree that DFM will acquire 100% of the share capital of Nasdaq Dubai from Borse Dubai and Nasdaq (owned as to 66.7% and 33.3% respectively). The total consideration for the transaction due from DFM will amount to US$ 121,304,348 and be paid as follows:

  • US$ 80,8 Million to be paid in cash to Borse Dubai.
  • 40 Million shares of DFM company with a value of US$ 20 Million to be transferred to Borse Dubai on behalf of Nasdaq.
  • US$ 20 Million in cash to Borse Dubai against the transfer of 40 Million shares from Borse Dubai stake to Nasdaq.

To fully satisfy the regulatory framework of Dubai Financial Services Authority (DFSA) and the UAE’s Securities and Commodities Authority (SCA), DFM is keen to restructure itself in the near future by establishing a new holding company. This holding company would wholly own both DFM and Nasdaq Dubai, which would continue to operate as two distinct markets. This restructuring will enable the two markets to work in harmony within their different regulatory frameworks. DFM will continue to be regulated by SCA and Nasdaq Dubai will continue to be regulated by DFSA.

Essa Kazim, Executive Chairman of Dubai Financial Market said: “Since the inception of DFM in 2000, we have remained committed to playing a vital role in developing regional financial markets through various initiatives and today’s announcement is a historic development for us and the region. This agreement is the outcome of a year-long review and ultimately aims to enhance efficiency and maximize value for all stakeholders.”

“With this transaction, DFM will gain a wider array of product offerings for investors and a clearer path to integrate certain back office and technology functions with Nasdaq Dubai. Unifying the ownership structure of the two exchanges will further strengthen Dubai's leading role as a center of capital markets and innovation that places the interest of investors, issuers and brokers first." Kazim added.

Jeff Singer, Chief Executive of Nasdaq Dubai said: “Under this new arrangement, Nasdaq Dubai will continue to function under the regulatory framework of Dubai Financial Services Authority (DFSA). Meanwhile, many investors will be able to trade seamlessly on both exchanges as key back office functions, such as custody and clearing, will be consolidated early next year. The combined strengths of the two exchanges will help attract new issuers, from across the region and internationally, who will be able to choose which of the two exchanges is appropriate for them according to their commercial and regulatory preferences. Through the ownership structure and closer operational links between the two exchanges, Dubai will achieve its goal of creating a powerful capital markets hub for the GCC and the wider Middle East."

The timetable for the completion of this transaction is approximately 6 weeks.

-Ends-

About Dubai Financial Market: Dubai Financial Market (DFM) was established as a public institution with its own independent corporate body. DFM operates as a secondary market for the trading of securities issued by public shareholding companies, bonds issued by the Federal Government or any of the local Governments and public institutions in the country, units of investment funds and any other financial instruments, local or foreign, which are accepted by the market. The DFM commenced operations on March 26, 2000. Following its initial public offering in November 2006, when DFM offered 1.6 billion shares, representing 20 per cent of its paid-up capital of AED 8 billion, DFM became a public joint stock company. Following the IPO, the Government of Dubai retained the remaining 80 per cent of DFM Company through Borse Dubai Limited. www.dfm.ae

For further information, please contact:

Atef Fathy

Vice President - Public Relations

Dubai Financial Market

Tel: +971 (4) 3055334

Email: afathy@dfm.ae

About Nasdaq Dubai

Nasdaq Dubai is the international financial exchange serving the region between Western Europe and East Asia. It welcomes regional as well as global issuers that seek regional and international investment. The exchange currently lists shares, derivatives, exchange-traded commodities, structured products, Sukuk (Islamic bonds) and conventional bonds. The majority shareholder of Nasdaq Dubai is Borse Dubai with a two-thirds stake. Nasdaq Group owns one third of the shares. The regulator of Nasdaq Dubai is the Dubai Financial Services Authority (DFSA). Nasdaq Dubai is located in the Dubai International Financial Centre (DIFC). For more information, visit www.Nasdaqdubai.com.

For more information, contact:

Mark Fisher

Nasdaq Dubai

Tel: +971 4 3612220

Mob: +971 50 6245805

Email: Mark.fisher@Nasdaqdubai.com

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