CME Group Inc, the parent company of the Chicago Mercantile Exchange,. has plans to purchase 90 percent of Dow Jones & Co.'s financial-indexes business in a deal approximating $607.5 million.
The deal is particularly of note in its novelty. This will be the first instance of the Down Jones Industrial Average being bought or sold since its creation by Charles Dow in 1896. Additionally, it will put CME in an even stronger position in the investment market. Already, the company has a market capitalization triple NYSE Euronext.
The Dow Jones Indexes will enter into a financial-indexes venture that will be dually owned by Dow Jones and CME. Dow Jones, currently held by News Corp., will still own and control 10 percent of the Dow Jones.
The deal has been in the works for some time, with the Dow Jones staking out potential buyers for the businesses indexes for as long as a year. The deal was delayed with CME; however, over price negotiations. Dow Jones was looking for somewhere in the ball park of $700 million, before the corporations settled on the current number.
The Dow Jones is expected to continue to fill a major role in the management of the Industrial Average with the managing editor of the Wall Street Journal, owned by Newscorp., continuing to select the companies represented in the Dow Jones Industrial Average.
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