According to sources close to the matter, McGraw-Hill, owner of Standard & Poor’s, is in talks with CME Group, owner of the Dow Jones Indexes about forming a joint venture. The deal would see McGraw-Hill owning about 75% of the JV while CME would hold about 20% and Dow Jones would receive a minimum stake. If the deal is successful, it would mark the first time the S&P 500 and the Dow lived under the same roof.
The deal has been taking shape since McGraw-Hill said it was looking to revamp its operations in an effort to support its share price. Management plans to split the company into two publicly traded entities. One will focus on its education unit while the other will feature the Standard & Poor’s index unit as well as its credit rating arms.
By combining index operations with CME, the companies are hoping to crease a robust leader in market index products, including derivatives of their flagship products. Jana Partners and the Ontario Teachers Pension Plan, shareholders of McGraw-Hill who wanted the company to split into four separate entities, did not comment on the proposal.
McGraw-Hill (MHP : NYSE : US$41.00), Net Change: -1.31, % Change: -3.10%, Volume: 3,607,123
CME Group (CME : NASDAQ : US$246.40), Net Change: -10.78, % Change: -4.19%, Volume: 566,219
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