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CME to pay for Dow Jones Indexes with jv debt
09 March 2010
CME Group will acquire 90% of Dow Jones Indexes in a joint venture which will leave Dow Jones with a 10% stake. Dow Jones, which is owned by News Corp, will gain $607.5m for 90% of the business, which the deal values at $675m. CME Group will contribute some market data services, which it has valued at $607.5m, to the joint venture.
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CME
Dow Jones
Dow Jones Indexes
News Corporation
Bourse Consult
The venture will raise about $613m of third party debt,
which will be used to pay $607.5m to Dow Jones.
Lynton Jones, chairman of consultancy Bourse Consult in
London, said: “It’s good for CME, but I’m not sure how good it is for the
marketplace. I don’t think it’s a good thing for exchanges to control data
vendors… It’s important for them to be independent.”
Dow Jones will continue to own the Dow Jones brand.
The transaction is expected to close in the first quarter of
2010, after it has been approved by regulators and after customary closing
conditions have been completed.
Derivatives based on Dow Jones Indexes only
constitute a small part of CME’s equity complex. It is estimated that they
represent 5% of CME equity index derivative volume, which amounts to just over
1% of CME’s total volumes