Borse Dubai to complete Nasdaq deal in early 2008

Dubai: Borse Dubai, the holding company of Dubai International Financial Exchange and Dubai Financial Market, is confident of completing its deal with Nasdaq in early 2008, through which it will acquire close to 20 per cent stake in the US exchange, said Eisa Kazim, chairman of Borse Dubai.

"We are sure the deal is going ahead and we will make sure that it will be completed within the time frame agreed by all parties," Kazim said at the Middle East Capital Markets conference in Dubai yesterday.

Borse Dubai and Nasdaq entered into a complex agreement on September 20 by which the Dubai firm would eventually sell all its OMX shares to Nasdaq in return for a 19.99 per cent in the merged entity between Nasdaq and OMX.

The deal would also result in Nasdaq acquiring a stake in DIFX and re-branding it into Nasdaq-DIFX.

The deal is subject to clearance by both the Securities and Exchange Commission (SEC) and the US Treasury. The Treasury as a leader of the inter-agency Committee on Foreign Investment in the United States (CIFUS), will assess whether the sale has any national security implications.

"We hope the deal will be completed in January or February. We need an approval from the authorities to buy OMX and to own 20 per cent in Nasdaq. That are the approvals we need from the authorities in Sweden and the US," Borse Dubai chief executive officer Per Larsson said in Dubai yesterday.

Borse Dubai and Nasdaq together raised the offer price to 265 crowns per share from the original Borse Dubai offer of 230 crowns per share and had acquired close to 50 per cent stake in OMX.

In the global consolidation of stock exchanges, Borse Dubai intends to play a key role in liking the Western markets with the emerging markets of Middle East, Africa and Asian markets.

"Borse Dubai's strategy is aligned with the global move towards stock exchange consolidation. We believe that after completing the process, the world will have four to five leading exchanges operators. In this context our alliance with OMX and Nasdaq will give all parties significant opportunities in expanding their businesses in both developed and emerging markets," Kazim said.

As part of the deal with Nasdaq, Kazim said DIFX and DFM will be operationally linked and the implementation of new OMX technology for the will create a trading platform on which investors can trade seamlessly.

"Despite being regulated by two authorities, our objective is to integrate the operations of both the exchanges into one platform on the concept of one exchange and two markets," he said.

While the association with Nasdaq is expected to attract a large number of regional listings to DIFX, Borse Dubai expects to play a key role in the regional integration of markets.

Fsactfile: Dubai bourse's stake in other exchanges

- DFM 80%
-DIFX 100%
-LSE 28%
-Nasdaq 19.99%* (*on completion of the deal)