The Clap
“Saudi Tadawul Group” (1111), the largest financial market in the region, has signed a binding sale and purchase agreement with “DME Holdings Limited” and its current shareholders. This is to acquire 32.6% of the latter’s shares for SAR 107 million (USD 28.5 million).
What
Tadawul clarified that as a result of this regulatory-approved deal, the group will indirectly invest in “Dubai Mercantile Exchange Limited,” owned by “DMG Holdings Limited.” Additionally, it will be the major shareholder alongside the “Chicago Mercantile Exchange”.
So What
The potential deal includes new and existing shares, with financing to be obtained through Islamic Sharia-compliant bank loans. The investments gathered through the ‘new shares’ are intended to provide the necessary financial resources to enhance the growth of Dubai Mercantile Exchange.
Some Context
Dubai Mercantile Exchange is renowned as the leading commodities exchange for trading energy contracts in the markets located east of the Suez Canal.
In addition to serving as a hub for futures contracts of Omani crude oil, witnessing actual delivery of the world’s largest quantity of crude oil, the futures contract for Omani crude is considered the ‘third most important indicator for global oil prices.
Now What
The agreement stipulates a rebranding of “Dubai Mercantile Exchange” to be named “Gulf Mercantile Exchange”, reflecting its ‘global status and importance as a regional commodity market.
Additionally, it will provide “Tadawul” with the opportunity to acquire a majority stake after the fourth year, within agreed-upon timeframes.
