Purpose – The purpose of this paper is to give an overview of UAE Stock Exchange industry.
In particular this paper aims to assess a potential merger between Dubai Financial Markets-Nasdaq-
Dubai and Abu Dhabi Securities Exchange, evaluating risks, rewards, policy and business implications.
Design/methodology/approach – The paper presents a theoretical framework and a literature
review of M&As in financial sector. It then carries out a case study on a potential merger between the
UAE Stock Exchanges and a discussion on the implications for the actors involved.
Findings – The contraction both in market capitalization and in trading value in the three UAE Stock
Exchanges caused by subprime financial crisis and market fragmentation could be a key factors in
implementing a merger between them. Because of high-fixed costs and trading platform, a single
consolidated stock exchange may benefit from significant economies of scale, particularly network
effects, and economies of scope.
Practical implications – This paper could be useful to Security and Commodity Authority, in order
to support a merger between Dubai and Abu Dhabi Stock Exchange. Given that UAE capital market
regulator has tried to improve efficiency in UAE stock market over the last years, a merger between
UAE Stock Exchanges could have positive effects on overall efficiency.
Originality/value – It is the first paper that analyze UAE Stock Exchange industry. It is the first
study that focusses on a potential merger between emerging markets’ stock exchanges. It is one of the
first contributions that relates stock exchanges belonging to emerging and developed countries.
