Dubai: Saudi Tadawul Group will acquire a 32.6 per cent stake in DME Holdings Limited, the parent company of Dubai Mercantile Exchange (DME), through the acquisition of a mix of new and existing shares, becoming the joint largest shareholder alongside CME Group.
As a result, Saudi Tadawul Group will become the joint largest shareholder in DME Holdings Limited alongside CME Group, with other shareholders including the Oman Investment Authority and Dubai Holding.
“DME will be rebranded as the Gulf Mercantile Exchange to reflect its position as the key regional commodities exchange in the Middle East with global relevance,” said the Riyadh-based holding company of the Saudi Exchange, the Securities Clearing Center Company (Muqassa), the Securities Depository Center Company (Edaa), and Wamid, a technology services business.
“The agreement also includes an ability for STG to increase its shareholding in the future. The shares acquired represent a mix of new and existing shares, with the proceeds from the new shares used to fund DME’s growth.”
DME is home to the DME Oman Crude Oil Futures Contract, that generates the world’s largest amount of physically delivered crude oil. The DME Oman contract serves as the third-most important crude oil benchmark globally, which is used by five national oil companies based in the Gulf Cooperation Council countries.
“The partnership will unlock further opportunities in the energy, metals, and agricultural commodity markets and support the ongoing transition to a sustainable economy through the launch of next-generation derivative contracts,” the statement added.
Ahmad Sharaf, Chairman of DME, said, “On behalf of DME Holdings Limited and its shareholders, I am delighted to welcome Saudi Tadawul Group as joint largest shareholder. In particular, I am proud that Saudi Tadawul Group has chosen to enter the global commodities market through its investment in DME.
“Not only will our expanded partnership support our flagship Oman Crude Oil Contract but it will also position us to become a champion for the transition to a more sustainable future.”
Khalid Al Hussan, Group CEO of Saudi Tadawul Group, said, “With the option to increase our stake in the future, this investment will contribute to our ability to diversify the Group’s revenues and opportunities and is firmly aligned with our growth strategy and ambitions as part of Vision 2030.