AS&H Clifford Chance advises Saudi Tadawul Group on its acquisition of a strategic stake in Dubai Mercantile Exchange creating Gulf Mercantile Exchange

22 January 2024

AS&H Clifford Chance has advised Saudi Tadawul Group (STG), a leading diversified capital markets group in the MENA region, on its acquisition of a 32.6% stake in Dubai Mercantile Exchange (DME), the Dubai based international commodities exchange. The shares acquired represent a mix of new and existing shares, with the funds raised to be used to fund the DME’s growth.

The acquisition makes STG the joint largest shareholder in DME Holdings Limited alongside CME Group, with other shareholders including the Oman Investment Authority and Dubai Holding and includes an option for STG to increase its shareholding in the future. The DME will be rebranded as the Gulf Mercantile Exchange to reflect its position as the key regional commodities exchange in the Middle East. The transaction is subject to closing conditions, including regulatory approvals.

The DME is headquartered in the UAE's Dubai International Financial Centre (DIFC) and following the completion of STG’s investment, the DME will continue to operate from the DIFC and be regulated by the Dubai Financial Services Authority, with trades executed on the DME cleared through CME Clearing and regulated by the U.S. Commodity Futures Trading Commission. The exchange is home to the DME Oman Crude Oil Futures Contract (DME Oman) - the third-most important crude oil benchmark globally and used by five national oil companies based in the Gulf Cooperation Council countries.

The cross-border team was led by Mohammed Al-Shukairy, M&A Partner at Clifford Chance in the Middle East with support from AS&H Clifford Chance Corporate Partner Daniel Royle.

Mansoor AlHagbani, Head of Capital Markets at AS&H Clifford Chance, provided specialist advice in relation to certain aspects of the transaction.

The core transaction team consisted of lead senior associates James Dadford (Dubai), Kimberly Ng (Dubai) and Rida Jamal (Riyadh), supported by associates Ismaila Ngum (Dubai), Leen Kayali (Riyadh) and trainee solicitor Zeena Sa'di (Dubai).

Working across its offices in the Middle East spanning Abu Dhabi, Dubai, as well with AS&H Clifford Chance in Saudi Arabia, the Firm has advised on some of the most complex, innovative and first-of-a-kind, as well as strategically important and sensitive M&A transactions. This includes advising the Public Investment Fund on its US$69 billion sale of its stake in SABIC, which remains the largest ever M&A transaction in the Middle East, as well as advising National Commercial Bank on its merger with Samba Financial Group, which created the largest bank in Saudi Arabia, on DP World's US$5 billion sale of a minority stake in three of its flagship UAE assets, and M42 on its acquisition of 100% of the share capital of Diaverum in a transaction that makes M42 the largest healthcare company in the Middle East.