- Saudi Tadawul Group will acquire a 32.6% stake in DME Holdings
Limited, the parent company of Dubai Mercantile Exchange (DME),
through the acquisition of a mix of new and existing shares,
becoming the joint largest shareholder alongside CME Group.
- DME will be rebranded as the Gulf Mercantile Exchange to
reflect its position as the key regional commodities exchange in
the Middle East with global
relevance.
- Through DME's flagship DME OQD Contract - the crude oil futures
contract that generates the world's largest amount of physically
delivered crude oil - physical delivery volumes reached 210 million
barrels of oil in 2023, up from 181 million in 2022.
- The investment by Saudi Tadawul Group brings together
world-class strategic partners and expertise to accelerate DME's
growth potential, including CME Group, the Oman Investment
Authority, and Dubai
Holding alongside global financial and commercial
shareholders.
- The partnership will unlock further opportunities in the
energy, metals, and agricultural commodity markets and support the
ongoing transition to a sustainable economy through the launch of
next-generation derivative contracts.
RIYADH, KSA and DUBAI, UAE, Jan. 18,
2024 /PRNewswire/ -- Saudi Tadawul Group Holding
Company (STG), a leading diversified capital markets group in the
MENA region, has entered into a binding agreement with existing
shareholders of DME Holdings Limited to acquire a 32.6% stake in
Dubai Mercantile
Exchange (DME), one of the leading international commodities
exchanges (the Agreement). As a result, Saudi Tadawul Group will
become the joint largest shareholder in DME Holdings Limited
alongside CME Group, with other shareholders including the Oman
Investment Authority and Dubai Holding as well as global
financial and commercial industry leaders. The Agreement also
includes an ability for STG to increase its shareholding in the
future. The shares acquired represent a mix of new and existing
shares, with the proceeds from the new shares used to fund DME's
growth.
STG's investment represents a significant opportunity to
leverage world-class capabilities and expertise, accelerating DME's
growth as a regional commodities leader that is well-positioned to
capture global commodities demand. The Agreement will support a
strategic move towards leveraging the Middle East's geographic proximity to both key
commodity production hubs and end-markets, with DME serving as a
bridge between production and end-markets. The partnership will
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.
Founded in 2007 and headquartered in the UAE, DME is home to the
DME Oman Crude Oil Futures Contract (DME Oman), that generates the
world's largest amount of physically delivered crude oil. The DME
Oman contract 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. DME and the DME
Oman contract operate to the highest standards of international
financial regulation. Its use is authorized by the
Dubai Financial
Services Authority (DFSA) and all trades executed on DME are
cleared through CME Clearing, which is regulated by the U.S.
Commodity Futures Trading Commission (CFTC).
Under the terms of the Agreement, ensuring the integrity of
the DME Oman contract has been of particular importance to all
parties. As such, it has been agreed that no changes to any aspects
of the DME Oman contract will result from the transaction
contemplated by the Agreement. In addition, to avoid conflict
of interest and safeguard the twin imperatives of neutrality and
price discovery, 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.
The transaction is subject to closing conditions, including as
to regulatory approvals. Following the completion of Saudi Tadawul
Group's investment, DME will continue to operate as usual from its
headquarters in Dubai
International Financial Centre (DIFC) and will remain regulated by
the Dubai Financial
Services Authority. CME Group will continue to provide its
industry-leading CME Globex trading technology and clearing
services to Gulf Mercantile Exchange. The CFTC's role in
overseeing CME Clearing's operations to protect the integrity of
transactions executed on the DME and mitigating risk to traders
will remain unchanged.
Ahmad Sharaf, Chairman of DME
Holdings Limited, said, "On behalf of DME Holdings Limited and
its shareholders, I am delighted to welcome Saudi Tadawul Group as
joint largest shareholder. In particular, I am proud that Saudi
Tadawul Group has chosen to enter the global commodities market
through its investment in DME Holdings Limited and this reflects
both Dubai Mercantile
Exchange's established position as one of the world's leading
energy-focused commodities exchanges and the opportunities for
growth open to Dubai
Mercantile Exchange.
"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."
Eng. Khalid Al Hussan, Group
CEO of Saudi Tadawul Group, said, "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.
With the option to increase our stake in the future, this
investment will contribute to our ability to diversify the Group's
revenues and opportunities and is firmly aligned with our growth
strategy and ambitions as part of Vision 2030. We look
forward to working together to unlock new growth opportunities,
leveraging our proximity to key financial and production hubs to
bridge demand from east and west."
Mulham Al Jarf, Deputy
President for Investments, Oman Investment Authority, said, "We
are delighted to welcome Saudi Tadawul Group as a new shareholder.
Its expertise and insights, along with what we have built over the
years with DME Holdings Limited in Dubai Mercantile Exchange, will be
invaluable as we continue to navigate through an ever-evolving
market landscape. This partnership marks a significant step in our
commitment to innovation and excellence in providing opportunities
for DME's regional and global stakeholders while maintaining the
integrity of DME Oman."
Derek Sammann, Senior Managing
Director, Global Head of Commodities, Options and International
Markets, CME Group, added, "We look forward to welcoming Saudi
Tadawul Group as a significant partner in the new Gulf Mercantile
Exchange, the premier commodities exchange in the MENA region.
Building on DME's successful benchmark Omani Crude Oil futures
contract, Saudi Tadawul Group's participation in the exchange will
unlock new opportunities for developing regionally relevant trading
products to help global market participants gain exposure or manage
energy, metals or agriculture price risk."
About Dubai
Mercantile Exchange Limited
Dubai Mercantile Exchange Limited (DME)
is the premier energy-focused commodities exchange east of the Suez
and home to the world's third crude benchmark. A total of 20
billion barrels of Omani crude oil have traded on the exchange
since inception in June 2007, while 3
billion barrels have been delivered via the DME's physical delivery
mechanism over the same period.
DME Holdings Limited is a joint venture between
Dubai Holding, Oman
Investment Authority and CME Group and the parent company of
DME. In addition to its core shareholders, global financial
institutions and energy trading firms such as Goldman Sachs, J.P.
Morgan, Morgan Stanley, Shell, Vitol and Concord Energy have taken
equity stakes in DME Holdings Limited, providing the exchange with
a resounding vote of confidence by major players in global energy
markets.
It is located within the Dubai International Financial Center
(DIFC) and regulated by the Dubai Financial Services Authority. All
trades executed on DME are cleared through and guaranteed by CME
Clearing. CME is regulated by the U.S. Commodity Futures Trading
Commission (CFTC) and is a Recognized Body by the DFSA.
About Saudi Tadawul Group
Founded in 2021 and
headquartered in Riyadh, Saudi
Tadawul Group (www.tadawulgroup.sa) is a holding company with a
portfolio of four integrated subsidiaries: the Saudi Exchange, one
of the largest 10 stock exchanges in the world by market
capitalization, the Securities Clearing Center Company (Muqassa),
the Securities Depository Center Company (Edaa), and Wamid, an
innovative applied technology services business. Saudi Tadawul
Group was established as part of a continuous development program
focused on enhancing the capital market and its infrastructure,
attracting foreign investments, and diversifying the Saudi economy.
The Group reinforces Saudi
Arabia's position as an attractive global investment
destination and the gateway to the MENA region. Saudi Tadawul
Group supports the development of an advanced capital market in
Saudi Arabia; one of the pillars
of the Financial Sector Development Program (FSDP), a Saudi Vision
2030 realization program.
About CME Group
As the world's leading derivatives
marketplace, CME Group (www.cmegroup.com) enables clients to trade
futures, options, cash and OTC markets, optimize portfolios, and
analyze data – empowering market participants worldwide to
efficiently manage risk and capture opportunities. CME Group
exchanges offer the widest range of global benchmark products
across all major asset classes based on interest rates, equity
indexes, foreign exchange, energy, agricultural products and
metals. The company offers futures and options on futures
trading through the CME Globex platform, fixed income trading via
BrokerTec and foreign exchange trading on the EBS platform. In
addition, it operates one of the world's leading central
counterparty clearing providers, CME Clearing.
About Oman Investment Authority
Oman Investment
Authority (OIA) is the investment arm of the Sultanate of
Oman, established by Royal Decree
No. 61/2020. It is a sovereign wealth fund operating as an
autonomous legal entity with complete financial and administrative
independence, reporting directly to the Council of Ministers. Its
primary mandate encompasses the prudent management of the Sultanate
of Oman's funds and assets, with a
strategic focus on optimizing returns and contributing to
implementing Oman Vision 2040.
OIA is entrusted with managing, investing, and developing the
nation's national and international assets. With a diverse
investment portfolio both locally and globally, OIA invests in over
50 countries, targeting various sectors, including food, energy,
logistics, ICT, services, finance and investment, food security,
tourism, mining, industry, and aviation. OIA is committed to
driving sustainable economic growth and contributing to the
well-being of Oman's people while
also supporting the Sultanate's vision of becoming a leading
investment destination in the region.
About Dubai
Holding
Dubai
Holding (www.dubaiholding.com) is a diversified global investment
company with operations in 13 countries and employing over 20,000
people. Established in 2004, Dubai Holding touches the lives of
millions of Dubai
residents and visitors through its extensive portfolio of over AED
130 billion worth of assets that support the diversification and
sustainable growth of Dubai's economy across 10 key sectors:
Real Estate, Hospitality, Leisure & Entertainment, Media, ICT,
Design, Education, Retail, Manufacturing & Logistics and
Science.
Our portfolio is comprised of five leading companies:
Dubai Holding Real
Estate, one of the largest landowners and integrated master
developers in Dubai;
Dubai Holding Asset
Management, which offers a world-class portfolio of 10 business
districts, 20 retail destinations and 15 residential communities
that collectively enable business and tourism activity as well as
an enriched living experience for residents; Dubai Holding Hospitality, which
manages leading hospitality assets and a diverse collection of
unique F&B concepts as well as top-notch hotel brands including
Jumeirah, Dubai
Holding's flagship hospitality brand and global luxury hotel
company; Dubai
Holding Entertainment, which comprises Dubai's leading leisure attractions,
media and entertainment venues such as Ain Dubai, Global Village,
Dubai Parks and
Resorts, ARN, and Roxy Cinemas, amongst others; and
Dubai Holding
Investments, a dedicated vehicle responsible for developing and
implementing the Group's investment strategy, and managing a
diverse portfolio of strategic and financial investments across
public and private markets in the UAE and internationally. Focused
on long-term and sustainable value creation, it has investments in
Warsan Waste Management Centre, Du and Azadea, as well as joint
ventures and partnerships with Brookfield, Emaar and others.
CME-G
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SOURCE CME Group