Tadawul Group finalizes acquisition of 32.6% stake in DME Holdings

Logo of The Saudi Tadawul Group Holding Co.

The Saudi Tadawul Group Holding Co. completed the acquisition of a 32.6% strategic stake in DME Holdings Limited, as the Group invested about SAR 107 million ($28.5 million) through the acquisition of a combination of new and existing shares, according to a statement.

It added that the transaction will be funded by the existing Islamic Sharia-compliant banking facilities.

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As a result of the transaction, the Group will invest indirectly in Dubai Mercantile Exchange Limited (DME), which is owned by DME Holdings Limited, and regulated by the Dubai Financial Services Authority. In addition, the Group will become the joint largest shareholder alongside CME Group (CME), according to the statement.

It further said that the investment in DME Holdings Limited will be held by Tadawul First Investment Co., a wholly owned subsidiary of Tadawul Investment Holding Co. (TIH) a wholly owned subsidiary of the Group, indicating that the aim of establishing the TIH is to be the strategic investment arm of the Group.

The Group appointed Rothschild & Co as financial advisor for the transaction. In addition, AS&H Clifford Chance acted as legal advisor and Deloitte Middle East acted as financial and tax due diligence and accounting advisor.

In accordance with the relevant regulatory requirements, the Group will announce any material developments in due course (if any).

Last January, Tadawul Group signed a binding sale and purchase agreement (SPA) with DME Holdings Ltd. and the latter’s current shareholders (namely Eagle Commodities Ltd., New York Mercantile Exchange Inc. (NYMEX) and Tatweer Dubai LLC.) to acquire a 32.6% stake in DME Holdings, according to data available to Argaam.