Business Unit News
Dow Jones Joins CME Group in Financial Index Venture
Formal Structure Ensures Integrity and Independence of Dow Jones Industrial Average
New York (February 10, 2010) – Dow Jones & Company and CME Group
announced an agreement to form a joint venture to operate a global financial
index services business.
The definitive agreement provides for CME Group to own 90% of the venture to
which Dow Jones will contribute its Dow Jones Indexes business valued at $675
million. Dow Jones will hold the remaining 10% and retain a key role in the
management of the Dow Jones Industrial Average. CME Group will contribute a
business which provides certain market data services valued at $607.5 million to
the joint venture. The new joint venture will also raise approximately $613
million in third-party debt which will be used to pay a $607.5 million
distribution to Dow Jones.
“A venture with CME Group provides advantages the index business needs to grow
and prosper,” said Les Hinton, chief executive officer of Dow Jones. “This
affords Dow Jones the opportunity to tighten its focus on its news and business
information products while preserving and protecting an iconic business brand.”
Taken together, the distribution received from the joint venture with CME Group
and the previously announced sale of the company’s interest in STOXX Ltd.
represent nearly $1 billion in proceeds to Dow Jones.
Terms of the agreement provide for the joint venture to license the Dow Jones
name for the financial-index business on a long-term basis. Ownership of the Dow
Jones brand, including trademarked names, remains with Dow Jones.
A formal structure will ensure the integrity and independence of Dow Jones index
products. For example, the managing editor of The Wall Street Journal will
continue to share in decisions regarding the composition and application of the
Dow Jones Industrial Average.
“The Dow Jones Industrial Average was created more than a century ago by the
editors of The Wall Street Journal as a convenient and accurate measure of
stock-market performance. This agreement perpetuates that purpose for the
Journal and for investors world-wide,” said Robert Thomson, managing editor of
the Journal.
Earlier this year, Dow Jones announced a new organizational structure combining
its two major divisions into a single business unit serving both enterprises and
consumers. This transaction with CME Group and the sale of the company’s
interest in STOXX further concentrate Dow Jones’s scope around core news and
information products such as the Journal, Dow Jones Newswires, Barron’s,
MarketWatch and Dow Jones Factiva.
This transaction, which is subject to regulatory approvals and other customary
closing conditions, is scheduled for completion in the 2010 first quarter.
Created in 1896 by Charles Dow, one of the founders of Dow Jones, the Dow Jones
Industrial Average originally had 12 stocks, including a leather maker, a steel
provider and a sugar producer. The industrial average was first published in the
Journal on May 26, 1896, but wasn’t regularly featured in the paper until
October of that year. The Dow Jones Industrial Average became a household name
after the stock market crash of 1929 when people beyond Wall Street began taking
an active interest in the status of the market.
The first index from Dow Jones debuted in 1884 at a time when railroads
dominated the economy. That predecessor of what is today the Dow Jones
Transportation Average was originally named the Dow Jones Railroad Average.
Dow Jones first commercialized its indexes in 1997. Those initial licensing
efforts led to the creation of the Dow Jones Indexes business.
ABOUT DOW JONES
Dow Jones & Company (www.dowjones.com) is
a News Corporation company (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV;
www.newscorp.com) and a leading provider
of global news and business information. Its principal products include The
Wall Street Journal, Dow Jones Newswires, Dow Jones Factiva, Barron's,
MarketWatch and Dow Jones Indexes. Its Local Media Group operates
community-based newspapers and Web sites. Dow Jones also provides news content
to television and radio stations.
Contact:
Howard Hoffman
Vice President, Corporate Affairs
(609) 520-4765
Howard.Hoffman@dowjones.com