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Dubai exchange in deal for 20% stake in Nasdaq
TheStar.com
September 21, 2007

STOCKHOLM/DUBAI–Nasdaq and Dubai's stock exchange struck a deal yesterday that shakes up ownership of some of the world's top share markets and takes the Nasdaq brand into the Middle East and Asia.

Under the agreement, U.S.-based Nasdaq and state-owned Borse Dubai ended their tussle to buy Nordic markets operator OMX AB. Nasdaq gets to buy OMX, while Borse Dubai takes on Nasdaq's 28 per cent stake in the London Stock Exchange for £14.14 a share and buys 20 per cent of Nasdaq itself, leaving Nasdaq with 3.5 per cent of the London market operator.

Under the complex deal, Dubai gets a 20 per cent stake in Nasdaq, making it the single largest owner of the U.S. exchange.

Shares of Nasdaq were up more than 1 per cent following the news.

The moves, which highlight the increasing influence of Gulf Arab states in global takeover deals, brought a swift response from Dubai's regional financial rival Qatar.

Qatar said it had bought a 20 per cent stake in LSE through the Qatar Investment Authority, or QIA, and urged OMX shareholders to take no action on the Dubai/Nasdaq offer. Sources later said the QIA was buying OMX shares.

Nasdaq will also take a 33 per cent stake in the Dubai International Financial Exchange, to be renamed Nasdaq DIFX. Borse Dubai will use this name in the Middle East, North Africa and South Asia.

"The combination will create the largest global network of exchanges and exchange customers linked by technology," Nasdaq CEO Bob Greifeld said.


But U.S. President George W. Bush said a national security review will be conducted on Nasdaq's plan to swap stakes with Borse Dubai.

"We are going to take a good look at it as to whether it has any national security implications involved in the transaction," Bush said in response to a question about the deal during a news conference.


Greifeld told analysts during a conference call that he does not anticipate regulatory hurdles to the deal because Borse Dubai's voting rights in Nasdaq will be "severely restricted."