From: Reuters
Published December 28, 2007 04:22 PM

Nasdaq retracts statement on U.S. OK of Dubai deal

WASHINGTON (Reuters) - Nasdaq said it erred in releasing a statement earlier on Friday that said the U.S. government had cleared a deal giving Dubai's state-owned stock exchange a minority stake in Nasdaq.

"A Nasdaq press release regarding the Committee on Foreign Investment in the United States (CFIUS) approval of Nasdaq's application was distributed in error. A formal announcement will be distributed when appropriate," the U.S. stock exchange said in a statement.

A Nasdaq spokeswoman declined to comment on whether the statement that was issued in error was accurate. She declined to explain how it was issued in error.

A Borse Dubai spokesman had no comment. A spokeswoman for the Treasury Department, which heads the foreign investment committee, had no comment.

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Earlier on Friday, Nasdaq issued a statement saying the CFIUS panel had approved the deal, clearing the way for the exchanges to proceed with a transaction in which Borse Dubai would get Nasdaq's stake in the London Stock Exchange Group and a minority stake in the U.S. exchange.

The deal would also allow Nasdaq, which lists many top U.S. tech companies such as Google Inc and Microsoft Corp, to proceed with its plan to combine with Stockholm-based OMX.

The deal is expected to help Nasdaq compete for volume and listings with NYSE Euronext <NYX.N>. It is one of many deals Nasdaq brokered this year amid a wave of consolidation among the world's securities exchanges. This year, Nasdaq reached deals to take over the Philadelphia and Boston stock exchanges.

In September, when the Dubai deal was announced, some U.S. Democratic lawmakers called for a careful national security review of the transaction. The Bush administration promised that the deal would be examined under a newly strengthened law requiring CFIUS to spend more time vetting deals to better inform Congress.

The stricter law followed a firestorm of criticism in 2006 when CFIUS approved the acquisition of some U.S. port operations by state-owned Dubai Ports World.

CFIUS, whose members include the secretaries of the Treasury, Homeland Security and State departments, is updating its rules to carry out the new law.

(Reporting by Rachelle Younglai; Editing by Toni Reinhold, Gary Hill)

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