Summary
The NASDAQ OMX Group, Inc. (NDAQ) filed an 8-K on December 22, 2009, reporting a significant corporate action involving its investment in NASDAQ Dubai Limited. The company has agreed to a realignment of ownership where its 33 1/3% stake in NASDAQ Dubai will be transferred to Dubai Financial Market PJSC (DFM), making NASDAQ Dubai a wholly-owned subsidiary of DFM. In exchange, NDAQ will receive a 1% equity interest in DFM and will be relieved of its obligation to contribute up to $25 million in additional capital to NASDAQ Dubai. This transaction is accompanied by a substantial pre-tax, non-cash impairment charge estimated at $81 million related to the NASDAQ Dubai investment, reflecting a reassessment of its carrying value. The technology and trademark licensing agreements with NASDAQ Dubai and Borse Dubai will remain in place.
Key Highlights
- 1NASDAQ OMX (NDAQ) is exiting its equity stake in NASDAQ Dubai Limited as part of an ownership realignment.
- 2NDAQ will receive a 1% equity interest in Dubai Financial Market PJSC (DFM) in exchange for its NASDAQ Dubai stake.
- 3NDAQ will be released from its obligation to provide up to $25 million in additional capital to NASDAQ Dubai.
- 4The company will record an estimated $81 million pre-tax, non-cash impairment charge related to this investment.
- 5Existing technology and trademark licensing agreements with Borse Dubai and NASDAQ Dubai will continue unchanged.
- 6The transaction is expected to result in a future gain or loss on NDAQ's DFM investment based on market conditions.
- 7The filing was prompted by the board's approval on December 16, 2009, and the subsequent agreement on December 22, 2009.