In the new joint venture, CME Group will have 90% ownership interest and Dow Jones will have a 10% ownership, which continues to do business as Dow Jones Indexes and includes the Dow Jones Industrial Average as well as approximately 130,000 index properties.
Dow Jones will contribute the Dow Jones Indexes business, valued at $675m, and CME Group will contribute certain market data services, valued at $607.5m, to the joint venture. CME Group Index Services, has issued $612.5m in aggregate principal amount of senior notes due 2018, with an annual coupon of 4.4% and an effective rate of 4.6%, which was used to pay a $607.5m distribution to Dow Jones. The notes are fully and unconditionally guaranteed by CME Group.
Terry Duffy, executive chairman of CME Group, said: “There is an increased demand for index products and services in the marketplace, particularly outside the US. By combining CME Group’s resources and expertise in index derivatives trading with Dow Jones’ world-class benchmark indices, we will be well positioned to develop and expand our index and market data offerings, fueling growth opportunities across all asset classes.”
Craig Donohue, CEO of CME Group, said: “We are pleased to announce the completion of our new joint venture with Dow Jones, which will provide us with new growth opportunities across asset classes and around the world. We look forward to building on the strong products and services, as well as client relationships that Dow Jones has developed. Both institutional and retail customers globally rely on Dow Jones’ benchmark indexes, particularly the Dow Jones Industrial Average.
“Together, we expect to create new opportunities for our customers by developing innovative new products and expanding our market data dissemination services to our global network of clients and exchange partners.”
