Indexing giants S&P Indices and Dow Jones Indexes have now formally combined to create S&P Dow Jones Indices.
S&P Dow Jones Indices publishes benchmarks that provide the basis for 575 ETFs globally with $387 billion in assets invested.
The McGraw-Hill Companies, owner of S&P Indices, and CME Group, the major shareholder in Dow Jones Indexes, have announced the completion of the deal that was first confirmed back in November last year, namely a joint venture between the companies’ two indexing divisions
The combined S&P Dow Jones Indices calculates over 830,000 indices and publishes benchmarks that provide the basis for 575 ETFs globally with $387 billion in assets invested, including the the world’s largest, the SPDR S&P 500 ETF (SPY). [See ETF boom boosts licensing activity at S&P Indices]
The new entity is also home to the Dow Jones Industrial Average (DJIA) and S&P 500, the iconic blue-chip US equity indices, as well other widely-followed indices such as the S&P/Case-Shiller Home Price Indices, the S&P GSCI and the Dow Jones-UBS Commodity Index.
“S&P Dow Jones Indices represents the next generation of investing and a great partnership between the future McGraw-Hill Financial and the CME Group,” says Harold McGraw III, chairman, president and chief executive officer of McGraw-Hill. “More assets are directly invested in products based upon our indices than any other index provider in the world.”
Terry Duffy, CME Group executive chairman and president, said, “Building on our long-term partnership with McGraw-Hill, this new JV will create new risk management index products and trading opportunities for both our institutional and retail customers around the world.”
Alexander Matturri, executive managing director of S&P Indices, has been named chief executive officer of S&P Dow Jones Indices and Lou Eccleston, president of S&P Capital IQ, will chair the company’s seven-member Board, which will be comprised of five directors designated by McGraw-Hill and two by CME Group.
Under the terms of the joint venture, which was approved by the Boards of both companies, McGraw-Hill contributed its S&P Indices business and the CME Group/Dow Jones joint venture contributed the Dow Jones Indexes business to create S&P Dow Jones Indices. Actual 2011 revenue for S&P Dow Jones Indices was $421 million.
McGraw-Hill owns 73% of S&P Dow Jones Indices, CME Group owns 24.4% through its affiliates, and Dow Jones & Company indirectly owns 2.6%. The new company will be part of the new McGraw-Hill Financial Company, following the separation of The McGraw-Hill Companies into two public companies.
The S&P Dow Jones Indices venture will seek to grow profits by increasing revenue through international and asset-class expansion, new product development, enhanced market data offerings and increased cross-selling opportunities. The joint venture also hopes to achieve cost savings and accelerate the time to market by leveraging technology, data procurement, other back office functions and McGraw-Hill Financial’s infrastructure.