Saudi Tadawul Group Acquires a Strategic Stake in Dubai Mercantile Alternate creating Gulf Mercantile Alternate

• Saudi Tadawul Group will purchase a 32.6% stake in DME Holdings Restricted, the dad or mum firm of Dubai Mercantile Alternate (DME), by the acquisition of a mixture of new and current shares, turning into the joint largest shareholder alongside CME Group.
• DME shall be rebranded because the Gulf Mercantile Alternate to replicate its place as the important thing regional commodities change within the Center East with international relevance.
• By means of DME’s flagship DME OQD Contract – the crude oil futures contract that generates the world’s largest quantity of bodily delivered crude oil – bodily supply volumes reached 210 million barrels of oil in 2023, up from 181 million in 2022.
• The funding by Saudi Tadawul Group brings collectively world-class strategic companions and experience to speed up DME’s progress potential, together with CME Group, the Oman Funding Authority, and Dubai Holding alongside international monetary and industrial shareholders.
• The partnership will unlock additional alternatives within the power, metals, and agricultural commodity markets and help the continued transition to a sustainable financial system by the launch of next-generation spinoff contracts.

Saudi Tadawul Group Holding Firm (STG), a number one diversified capital markets group within the MENA area, has entered right into a binding settlement with current shareholders of DME Holdings Restricted to amass a 32.6% stake in Dubai Mercantile Alternate (DME), one of many main worldwide commodities exchanges (the Settlement). Because of this, Saudi Tadawul Group will turn out to be the joint largest shareholder in DME Holdings Restricted alongside CME Group, with different shareholders together with the Oman Funding Authority and Dubai Holding in addition to international monetary and industrial {industry} leaders.  The Settlement additionally consists of a capability for STG to extend its shareholding sooner or later. The shares acquired symbolize a mixture of new and current shares, with the proceeds from the brand new shares used to fund DME’s progress.

STG’s funding represents a major alternative to leverage world-class capabilities and experience, accelerating DME’s progress as a regional commodities chief that’s well-positioned to seize international commodities demand. The Settlement will help a strategic transfer in the direction of leveraging the Center East’s geographic proximity to each key commodity manufacturing hubs and end-markets, with DME serving as a bridge between manufacturing and end-markets. The partnership will allow the brand new Gulf Mercantile Alternate to seize demand for power, metals, and agricultural commodity markets and help the continued international transition to a sustainable financial system by the launch of next-generation derivatives contracts as a part of the transition to a sustainable financial system.

Based in 2007 and headquartered within the UAE, DME is house to the DME Oman Crude Oil Futures Contract (DME Oman), that generates the world’s largest quantity of bodily delivered crude oil. The DME Oman contract serves because the third-most necessary crude oil benchmark globally, which is utilized by 5 nationwide oil firms primarily based within the Gulf Cooperation Council international locations. DME and the DME Oman contract function to the very best requirements of worldwide monetary regulation. Its use is permitted by the Dubai Monetary Providers Authority (DFSA) and all trades executed on DME are cleared by CME Clearing, which is regulated by the U.S. Commodity Futures Buying and selling Fee (CFTC).

Below the phrases of the Settlement, guaranteeing the integrity of the DME Oman contract has been of specific significance to all events. As such, it has been agreed that no modifications to any facets of the DME Oman contract will consequence from the transaction contemplated by the Settlement. As well as, to keep away from battle of curiosity and safeguard the dual imperatives of neutrality and worth discovery, no Saudi Arabian crude oil contract shall be traded, offered or purchased on, or listed to, nor will Saudi crude be delivered in opposition to, the DME Oman contract through DME.

The transaction is topic to closing circumstances, together with as to regulatory approvals. Following the completion of Saudi Tadawul Group’s funding, DME will proceed to function as traditional from its headquarters in Dubai Worldwide Monetary Centre (DIFC) and can stay regulated by the Dubai Monetary Providers Authority. CME Group will proceed to supply its industry-leading CME Globex buying and selling expertise and clearing providers to Gulf Mercantile Alternate.  The CFTC’s function in overseeing CME Clearing’s operations to guard the integrity of transactions executed on the DME and mitigating danger to merchants will stay unchanged.

Ahmad Sharaf, Chairman of DME Holdings Restricted, stated, “On behalf of DME Holdings Restricted and its shareholders, I’m delighted to welcome Saudi Tadawul Group as joint largest shareholder. Particularly, I’m proud that Saudi Tadawul Group has chosen to enter the worldwide commodities market by its funding in DME Holdings Restricted and this displays each Dubai Mercantile Alternate’s established place as one of many world’s main energy-focused commodities exchanges and the alternatives for progress open to Dubai Mercantile Alternate. 

“As we enter a brand new period of progress because the Gulf Mercantile Alternate, we’re excited in regards to the potential to construct a regional commodities powerhouse with international relevance. Not solely will our expanded partnership help our flagship Oman Crude Oil Contract however it’s going to additionally place us to turn out to be a champion for the transition to a extra sustainable future.”

Eng. Khalid Al Hussan, Group CEO of Saudi Tadawul Group, stated, “Our funding in DME Holdings Restricted supplies Saudi Tadawul Group with entry to one of the crucial necessary asset lessons globally for the primary time, embedding commodities buying and selling into the Center East’s largest capital markets group. With the choice to extend our stake sooner or later, this funding will contribute to our means to diversify the Group’s revenues and alternatives and is firmly aligned with our progress technique and ambitions as a part of Imaginative and prescient 2030.  We sit up for working collectively to unlock new progress alternatives, leveraging our proximity to key monetary and manufacturing hubs to bridge demand from east and west.”

Mulham Al Jarf, Deputy President for Investments, Oman Funding Authority, stated, “We’re delighted to welcome Saudi Tadawul Group as a brand new shareholder. Its experience and insights, together with what we now have constructed over time with DME Holdings Restricted in Dubai Mercantile Alternate, shall be invaluable as we proceed to navigate by an ever-evolving market panorama. This partnership marks a major step in our dedication to innovation and excellence in offering alternatives for DME’s regional and international stakeholders whereas sustaining the integrity of DME Oman.”

Derek Sammann, Senior Managing Director, World Head of Commodities, Choices and Worldwide Markets, CME Group, added, “We sit up for welcoming Saudi Tadawul Group as a major companion within the new Gulf Mercantile Alternate, the premier commodities change within the MENA area. Constructing on DME’s profitable benchmark Omani Crude Oil futures contract, Saudi Tadawul Group’s participation within the change will unlock new alternatives for creating regionally related buying and selling merchandise to assist international market contributors acquire publicity or handle power, metals or agriculture worth danger.”