Borse Dubai, which was formed by the emirate's government and controls the Dubai Financial Market and Dubai International Financial Market Exchange, plans to buy at least 25% of Sweden's OMX AB, which operates European exchanges in cities such as Helsinki and Stockholm.

Nasdaq Stock Market, Inc. (NASDAQ: NDAQ), the operator of the NASDAQ Stock Exchange, was in the process of a takeover of OMX valued at $3.7 billion; however, Borse Dubai has already purchased almost 5% of OMX for 230 kronor per share, an 11% premium over the 208.1 kronor per share Nasdaq agreed to pay for the exchange operator. Also, Borse Dubai has entered into an option agreement to acquire another 22.5% of OMX at 230 kronor per share.

Nasdaq has asked OMX shareholders to ignore the Borse Dubai bid, but Nasdaq shares are actually up almost 5% on news as it is seen as creating the possibility of a larger deal between the three companies.

Any deal with Borse Dubai would but Nasdaq in a better position to compete with its biggest rival, the New York Stock Exchange, which has already inked a deal combining it with the large European exchange Euronext to form NYSE Euronext (NYSE: NYX).

Nasdaq recently failed in a takeover attempt of the London Stock Exchange that would have kept it competitive with NYSE in the European exchange market. Its $5.3 billion bid fell apart in the face of LSE management resistance. Many analysts feel that without a better foothold in Europe, any new attempt to by Nasdaq to purchase the LSE is also doomed to fail.

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