S&P and Dow Jones announce deal to unite indexing businesses

McGraw-Hill and CME Group - owners of S&P Indices and Dow Jones Indexes - have agreed a deal to form a joint indexing venture.

Together the companies' indices provide the basis of more than 500 ETFs, with more than $380bn of assets under managment.

The agreement will create S&P/Dow Jones Indices, a new global index provider with approximately $6trn in assets benchmarked to its indices. It will also see the S&P 500 and Dow Jones Industrial Average brought together under one provider.

The venture "will create a leading index provider which will drive value for all stock holders...it will have the depth and breadth to provide retail and institutional investors with the cutting edge products and services they need to invest and to manage risk in today's complex markets," said Harold McGraw, chairman, president and CEO of McGraw-Hill in a webcast to announce the deal.

"The joint venture will accelerate innovation and new product development to the benefit of market participants across the globe," he added.

Under the deal, McGraw-Hill will own 73% of S&P/Dow Jones Indices, CME Group will own 24.4% and Dow Jones will own 2.6%. The transaction is expected to be completed in the first half of 2012, subject to regulatory approval.

Dow Jones previously held a stake in European-based index provider Stoxx, which it sold in 2009. Subsequently, CME Group bought a 90% share in Dow Jones Indexes, a deal which was announced earlier this year.