Derivatives Exchange Operator Buys Dow Jones Indexes

By: E&P Staff Chicago-based derivatives exchange operator CME Group Inc. will acquire 90% of the Dow Jones indexes business in a deal expected to be completed this quarter. News Corp.'s Dow Jones & Co. will hold the remaining 10% in CME Group Index Services.

Dow Jones will retain ownership of the brand, and the familiar for the industrial average will keep its name. Originally based on 11 stocks, the Dow Jones Industrial Average is variously reported as having been created in 1884, 1886, and 1896.

Dow Jones proceeds from the debt-funded venture will amount to $607.5 million, according to Reuters, which reported that CME's exclusive right to offer futures on Dow Indexes was set to expire in 2014. It now expects to have "very long-term license rights," said CEM Group Chief Executive Craig Donohue.

Dow Jones flagship The Wall Street Journal reported the pending sale late last month. Financial Times noted last week that the negotiations with CME followed Dow Jones' agreement late last year to sell its stake in index company Stoxx to Deutsche B?rse and SIX, its Swiss partner, for $309 million, and that "proceeds from the sale... could be timely" after News Corp.'s $500 million settlement of a lawsuit filed by freestanding ad insert distributor Valassis (E&P Online, Feb. 1).