Borse Dubai will acquire a 19.99% stake in Nasdaq in a business alliance that seeks to create the Nasdaq OMX Group, a global marketplace with trading centers in the U.S., Europe, the Middle East and some emerging markets. Borse Dubais voting rights in Nasdaq will be capped at 5% to satisfy Nasdaqs bylaws.
The transaction also includes Nasdaqs acquisition of Borse Dubais shares of OMX AB, a North European exchange group that both Nasdaq and Borse Dubai were seeking to acquire. Government-controlled Qatar Investment Authority is a third bidder for OMX, pledging in a statement to up the ante for the European electronic marketplace.
Separately, Borse Dubai will also acquire a 28% stake in the London Stock Exchange Group owned by Nasdaq. QIA, which has deep coffers from the oil-producing region, is vying for control of the LSE as well.
Analyst Niamh Alexander at Keefe, Bruyette & Woods described the proposed deals as an impressive result for Nasdaq from what may have been a bidding war. Nasdaq is expected to record a near 30% gain on its investment in LSE.
Nasdaq will also become a strategic shareholder and the leading partner of Dubai International Financial Exchange, a market, which will be renamed under the Nasdaq brand.
The pact is subject to a series of regulatory approvals and will terminate if it cannot be completed by Feb. 15.