22 Dec, 2009Dubai Financial Market to Acquire NASDAQ Dubai for US$ 121 Million

Borse Dubai and NASDAQ OMX 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 Financial Market, PJSC ( DFM ) announced today that it has made an offer to Borse Dubai Ltd. ( Borse Dubai ) and The NASDAQ OMX Group Inc. ( NASDAQ OMX ) 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 OMX , 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 OMX 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 OMX will continue to allow NASDAQ Dubai to use its brand and technology. The NASDAQ OMX 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 OMX (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 OMX.

• US$ 20 Million in cash to Borse Dubai against the transfer of 40 Million shares from Borse Dubai stake to NASDAQ OMX.

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.