Stock exchange owner and operator Saudi Tadawul Group has announced it will buy a 32.6% stake in the parent company of Dubai Mercantile Exchange (DME) and become the Emirati trading platform’s joint largest shareholder alongside CME Group.
The purchase will be made through the acquisition of a mix of new and existing shares. Other shareholders in the group include the Oman Investment Authority and Dubai Holding.
As a result of the transaction, DME will be rebranded as the Gulf Mercantile Exchange.
DME lists the Oman crude oil futures contract, that generates the world’s largest amount of physically delivered crude oil. It also serves as the third-most important crude oil benchmark globally, which is used by five national oil companies based in the Gulf Cooperation Council countries.
“Our investment in DME Holdings Limited provides Saudi Tadawul Group with access to one of the most important asset classes globally for the first time, embedding commodities trading into the Middle East’s largest capital markets group,” said Eng. Khalid Al Hussan, Group CEO of Saudi Tadawul Group.
The partnership is expected to enable the new Gulf Mercantile Exchange to capture demand for energy, metals, and agricultural commodity markets and support the ongoing global transition to a sustainable economy through the launch of next-generation derivatives contracts as part of the transition to a sustainable economy.
Ahmad Sharaf, Chairman of DME Holdings Limited, said, “As we enter a new era of growth as the Gulf Mercantile Exchange, we are excited about the potential to build a regional commodities powerhouse with global relevance. Not only will our expanded partnership support our flagship Oman Crude Oil Contract but it will also position us to become a champion for the transition to a more sustainable future.”
Saudi Tadawul Group has confirmed that no Saudi Arabian crude oil contract will be traded, sold, bought on, or indexed to, nor will Saudi crude be delivered against, the DME Oman contract via DME, as a way of avoiding conflicts of interest.
