WSJ Report: CME Group in the Lead to Buy Dow Jones Indexes

Includes: CME, MXB, NWS, RMG
by: Zack Miller

The WSJ reported that the CME Group (NASDAQ:CME) appears to be the leading contender to purchase the News Corp. (NASDAQ:NWS) stock-index business. Acquired as part of News Corp.’s $5.2 billion purchase of Dow Jones in 2007, this is the same business that owns the Dow Jones Industrial Average.

The WSJ reports that talks stalled after Dow Jones asked for a higher price, close to $700 million.

Bloomberg reports that this could be a good opportunity for MSCI (MXB) to position itself to make the purchase. MSCI has been rumored to be more than sniffing around the RiskMetrics group (RMG), which according to BusinessWeek, recently put itself on the acquisition block.

The index business contributed about $90 million to the top line for the Down Jones unit. Dow Jones runs more than 130,000 equity indices.

What’s interesting here is that the CME Group, operator of the Chicago Mercantile Exchange, may be making its way into the index business. According to the WSJ:

A purchase would be a new step for the CME, which operates the Chicago Mercantile Exchange, and has a strong position in commodities, futures and options trading.

In my opinion, I don’t think investors could really get juiced over the new ‘CMEIA’ — the Chicago Mercantile Exchange Industrial Average. It’s a mouthful.

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