Nasdaq Strikes Deal With Borse Dubai

Essa Kazim, shairman of Borse Dubai, left, and Nasdaq CEO Robert Greifeld gestures during news conference Thursday Sept. 20, 2007 in Stockholm. Nasdaq Stock Market Inc. and Borse Dubai have reached a deal under which Nasdaq will take over Nordic bourse operator OMX AB, while Borse Dubai acquires just under 20 percent of Nasdaq and 28 percent of the London stock exchange. (AP Photo/Mats Andersson) (Mats Andersson - AP)

STOCKHOLM, Sweden -- The Nasdaq Stock Market is selling a nearly 20 percent stake to Borse Dubai and is taking control of the Nordic exchange operator OMX as part of a sweeping settlement of their battle for control of OMX.

In a global stock market shakeup, Borse Dubai and a group from Qatar also moved to become the largest stakeholders in the London Stock Exchange.

The deals announced Thursday would help the U.S.-based Nasdaq avoid a bidding war with cash-rich Borse Dubai for OMX.

But the transactions involving Dubai and Nasdaq could face scrutiny in the United States, where a Dubai-owned company's plan to manage some U.S. ports previously raised an uproar.

The Nasdaq Stock Market Inc. would take control of Stockholm-based OMX while selling to Borse Dubai a one-fifth stake in itself as well as a 28 percent in the London Stock Exchange. Nasdaq had owned a 31 percent stake in the London exchange.

Hours later, the Qatar Investment Authority said it had bought 20 percent of the London exchange _ possibly setting the stage for a battle for control of Europe's largest exchange, which has fought off a multitude of bids in the past few years and is now nearly half-owned by Middle Eastern groups.

Under the terms the two agreed on, Borse Dubai will go ahead with its $4 billion cash bid for OMX, but when that transaction is completed it will sell all shares in the Stockholm-based company to Nasdaq.

In exchange, Nasdaq will pay Dubai 11.4 billion kronor ($1.72 billion) in cash and give it a 19.99 percent stake in Nasdaq. Dubai will also acquire a 28 percent stake in the London Stock Exchange from Nasdaq, which failed to take over the LSE earlier this year. It wasn't clear what would happen to its remaining 3 percent stake in the London exchange.

"Taken together, these strategic actions will provide us with a footprint unlike any other exchange, creating a global exchange leader, with operations in key markets around the world," Nasdaq Chief Executive Bob Greifeld said in a statement.

OMX operates stock and derivatives exchanges in Sweden, Denmark, Iceland, Finland and in the Baltic countries of Estonia, Latvia and Lithuania.

"By entering into this partnership with Nasdaq, we will benefit from Nasdaq's world-leading brand, technology and platform," Borse Dubai Chairman Essa Kazim said. "In addition, this combination will establish a gateway to large pools of liquidity."

The LSE said it had no immediate comment on that deal, but welcomed the Qatar stake purchased announced later.