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Goldman, others, including Shell, take stakes in Dubai exchange

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Goldman, others take stakes in Dubai exchange

August 12, 2008

DUBAI — The Dubai Mercantile Exchange said it concluded the sale of equity stakes in the bourse to six international financial institutions, including Goldman Sachs Group Inc. and Morgan Stanley.

The sale follows the “approval from the DME’s board of directors for the release of an indirect equity stake of up to 20% in the exchange,” DME said in an emailed statement.

“The board has approved to dilute 20% of the equity of DME, and these six companies have picked up a part of this 20%,” DME’s chairman, Ahmad Sharaf, said in a conference call. “This is all I can disclose at this point.”

The DME was originally established as a joint venture among New York Mercantile Exchange Inc., the United Arab Emirates’ government development company Tatweer and the Oman Investment Fund.

According to the statement, the DME’s new shareholding structure will include Goldman Sachs, Morgan Stanley, Vitol, Concord Energy Inc., Casa Energy Trading and a Royal Dutch Shell PLC company. DME officials declined to identify the Shell company, saying it is part of the Shell group of companies.

The officials said the terms of the equity participation among the parties remain private and confidential.

DME’s chief operating officer, Gary King, said the addition of the new partners is part of the continuing “development of the DME.”

“The Dubai Mercantile Exchange not only offers strong potential from an investment perspective, but also constitutes a strategic partnership that will develop our footprint in the Middle East,” Georges Makhoul, head of Morgan Stanley in the Middle East and North Africa, said.

The DME lists the Oman crude-oil futures contract, the only physically delivered Middle East sour crude-oil futures contract, which is increasingly seen as a global benchmark for the pricing of Middle East sour crude oil.

Write to Majdoline Hatoum at [email protected]

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