Dow Jones will contribute the Dow Jones Indexes business, valued at $675m, to the joint venture. CME Group will contribute certain market data services, valued at $607.5m, to the joint venture. The venture also will raise approximately $613m in third-party debt which will be used to pay a $607.5m distribution to Dow Jones.
Building on the brand and market expertise of both CME Group and DJI, the partnership will expand the global reach of its index creation, calculation services and market data businesses across complementary asset classes, including cash, derivatives and customized OTC markets.
Terry Duffy, executive chairman of CME Group, said: “Joining the resources and expertise of one of the world’s leading marketplaces for equity index derivatives trading with a premier index provider is an exciting next step that will allow us to expand our index and market data offerings as well as to fuel growth opportunities in our equity index complex. We expect this transaction will allow us to further diversify our revenue streams, creating sustainable new value for our customers and shareholders.”
Craig Donohue, CEO of CME Group, said: “Our majority interest in this venture represents an important new milestone in CME Group’s transformation into a global financial services company, further diversifying our global product development capabilities and allowing us to reach new customers in both the institutional and retail market segments. We look forward to continuing the strong relationships that Dow Jones has developed with clients and other leading exchanges that offer exchange traded funds, equity index options and structured products which complement CME Group’s equity index contracts.”
Barclays Capital is acting as financial advisor to CME Group and Kirkland & Ellis is acting as legal advisor.
Pending approval by regulators and completion of customary closing conditions, the transaction is expected to close during the first quarter of 2010.
