NASDAQ Stock Market Inc and Borse Dubai, competing to buy Nordic exchange operator OMX AB, agreed to give NASDAQ control of OMX, while Dubai gets a stake in the US bourse and a holding in London Stock Exchange Group Plc.
NASDAQ will also make an investment in the Dubai International Financial Exchange, it said in a statement yesterday.
Dubai will in return get a 19.99 percent stake in NASDAQ, restricted to 5 percent of voting rights, as well as a 28 percent of the London Stock Exchange from NASDAQ.
"It solves a good portion of their problem by getting that LSE stake off their books and freeing up capital, while at the same time removing an obstacle to their acquisition of OMX," said William Cline, chief executive officer of Acai Solutions LLC, a New York-based consultant on capital markets, before the announcement.
"It strikes me as a sound strategic move," he said.
NASDAQ, led by chief executive officer Robert Greifeld, had made a cash-and-stock bid for OMX in May, an approach that was endorsed by OMX management under CEO Magnus Boecker.
Borse Dubai, headed by former OMX CEO Per Larsson, trumped NASDAQ's bid last month with an all-cash bid for OMX valued at 27.7 billion kronor (US$4.2 billion).
Dubai's bid for OMX threatened to foil NASDAQ's latest attempt to expand into Europe, after the US market failed to take over the LSE.
Greifeld redoubled efforts to gain control of OMX before shareholders could vote on Dubai's superior bid and last month opted to sell the LSE stake to focus on OMX instead.
NASDAQ is seeking a foothold in Europe to compete with bigger rival NYSE Euronext, which operates stock and derivatives exchanges on both sides of the Atlantic Ocean.
OMX would give NASDAQ control of seven Nordic and Baltic exchanges, where the value of shares traded daily has more than doubled since 2003.
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