UAE said to revive bourse merger plan after huge aluminum deal

The United Arab Emirates has revived a proposal to merge its two main stock exchanges in a state-backed deal that could boost trade in the local market and attract more foreign investment to the Gulf state, sources familiar with the plan said.

Talks on a potential merger between the Dubai Financial Market (DFM) and the Abu Dhabi Securities Exchange (ADX) have occurred on and off since at least 2010.

There are no common listings on the exchanges; a merger could deepen the equity market of the Arab world’s second biggest economy, encouraging more companies to list their shares and international institutions to buy them.

But progress toward the proposed tie-up halted because of differences over how to value the exchanges, and because the two emirates were preoccupied by other issues such as the aftermath of Dubai’s 2009-2010 corporate debt crisis.

In recent weeks, however, officials in Abu Dhabi and Dubai have focused on the idea again, with the two emirates showing willingness to consolidate some of their business interests to compete in the global economy, the sources said.

“The entire valuation, structuring of the deal is done. It’s been an ongoing process and the decision is now pending at the highest authorities in the two emirates,” one source said.

“It’s not a question of whether they would do it now. It’s a question of when,” added the source, speaking on condition of anonymity as the matter has not been made public.

Spokesmen for ADX, DFM and the Abu Dhabi government declined to comment. A spokeswoman for the Dubai government’s media office was not immediately available for comment. UAE market regulator Securities and Commodities Authority said it had no information on the matter.