NYSE Euronext purchased a 25% stake in the Doha Securities Market (DSM) in Qatar for US$250 million. The closing of the transaction is expected to take place early during the fourth quarter of 2008, subject to the completion of documentation and obtaining non-objection from regulators.
Highlights
* Strategic relationship between the State of Qatar and NYSE Euronext to build a new, internationally integrated cash and derivatives exchange in Doha
* Interests of both the State of Qatar and NYSE Euronext aligned through equity participation, technology integration and market structure harmonisation. As part of this agreement, both parties commit to work together as partners to explore other opportunities in the Middle East
* NYSE Euronext to purchase a 25% stake in the DSM for US$250 million in cash, the largest investment ever made by NYSE Euronext in a foreign exchange.
* NYSE Euronext to receive three of the eleven seats on DSMs board of directors
* The State of Qatar to retain ownership of the remaining 75% of the DSM through the Qatar Investment Authority;
* NYSE Euronext has been selected as the technology provider by the State of Qatar and the DSM for both the cash equities and derivatives markets
* NYSE Euronext to act as a partner managing the operation of the new exchange, including the appointment of the senior management team, and providing technology services
“This represents a hugely significant development for Doha s financial markets, for the people of Qatar and for the Middle East,” says Sheikh Hamad bin Jassim bin Jabor Al-Thani, Qatar’s prime minister and minister of foreign affairs. “We are delighted to partner with NYSE Euronext which has a global reputation for excellence. Its a significant endorsement of Qatar s importance in the worlds capital markets and will provide considerable opportunities for our future generations. This partnership lays the foundations for us to build Doha into a world class financial center. Our countrys financial markets will be an integral part of a group which links together the worlds major trading centers across the US and Europe and now the Middle East. Todays announcement represents the cornerstone of Qatars vision to bring our entire economic infrastructure up to the highest international standards, thereby laying the best possible foundations for the development of this dynamic nation.”
“On behalf of our Board and all my colleagues at NYSE Euronext, I welcome this mutually beneficial strategic partnership with the State of Qatar and the Doha Securities Market,” says Duncan Niederauer, CEO of NYSE Euronext. “It is a great privilege to align NYSE Euronext with Qatar and Doha s financial marketplace, whose role is increasingly important in the Gulf region and globally. We are greatly appreciative to His Excellency Sheikh Hamad bin Jassim bin Jabor Al-Thani, His Excellency Yusof Kamal, Dr. Hussain Al-Abdulla and the entire leadership team of the Doha Securities Market for this exciting opportunity, which complements our strategic business goals and benefits our shareholders.”
Qatar is expected to be the second-largest economy in the region by 2015.
The new market, which will include cash equities, derivatives and other commodity-based trading products and will be adopted by the new DSM board.
Under terms of the agreement, the new venture will adopt NYSE Euronext technology for both cash equities and derivative markets.
The trading currency will be the Qatari Riyal, although it is expected that there will be capabilities to list multi-currency instruments.
The State of Qatar plans to sell a minority share stake of the DSM in a domestic IPO. The IPO process will be undertaken within the next three years.