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Saudi Tadawul Group (STG) is acquiring a 32.6% stake in Dubai Mercantile Exchange (DME) for USD 28.5 mn, according to a press release. The acquisition will see STG acquiring the strategic stake in DME’s parent company, DME Holdings Limited, making it the company’s largest shareholder, along with financial services company CME Group, Reuters reports. Other DME Holdings Limited shareholders include Oman Investment Authority and Dubai Holding. The agreement also grants STG the option to increase its ownership in the future.
The fine print: After the STG investment, DME will continue to operate out of the Dubai International Finance Center, and will remain under the regulation of the Dubai Financial Services Authority. CME Group will continue offering its CME Globex trading technology and clearing services to Gulf Mercantile Exchange. The CFTC’s oversight of CME Clearing’s operations will remain unaffected.
Cementing regional role: As part of the agreement, STAG is rebranding DME to Gulf Mercantile Exchange, which the company says is meant to emphasize DME’s role as a major commodities exchange in the Middle East with global significance, according to the press release.
Keeping the DME Oman contract out of it:The agreement stipulates that no changes will occur to any aspect of DME Oman contract and that “no Saudi Arabian crude oil contract will be traded, sold or bought on, or indexed to, nor will Saudi crude be delivered against, the DME Oman contract via DME” to maintain neutrality and price discovery.
What is the DME Oman contract? DME hosts the DME Oman contract, the world’s largest physically delivered crude oil generator. This contract ranks as the third most important global benchmark for crude oil and is utilized by five national oil companies in GCC countries.
OTHER M&A NEWS-
Seventy Second Investment Company secures approval for stake acquisition in India’s Manipal Health Enterprises: India’s competition watchdog has granted a unit of Mubadala’s Mamoura Diversified Global Holding approval to obtain a stake in one of India’s major healthcare facilities, Business Standard reported, citing a filing by the Competition Commission of India. Mubadala’s investment vehicle — dubbed Seventy Second Investment Company — will acquire the undisclosed stake in the company.
About Manipal Health Enterprises: The Manipal Education and Medical Group (MEMG) subsidiary and healthcare provider has a network of 33 hospitals spanning 17 cities, according to its website.
