Deutsche Brse AG and SIX Group to become sole shareholders of index provider STOXX Ltd. ransaction to accelerate global expansion of shareholders index busine Parties to acquire Dow Jones & Companys stake for 132.1 million plus earn-out; additional payment by STOXX of 74m to Dow Jones & Company for certain intellectual property rights Deutsche Brse to consolidate STOXX; SIX Group to lead new entity for index calculation Closing of transaction expected latest in Q1/2010 Deutsche Brse AG and SIX Group announced today that they have signed definitive agreements under which they will become sole operators of the Swiss ndex provider Stoxx Ltd. for a total consideration of 206.1m in cash, comprised of 132.1m for Dow Jones & Companys one-third stake and 74m for certain intellectual property rights acquired by Stoxx. There will be the opportunity for Dow Jones & Company to earn up to a further 29.0m depending on business performance, with any payment to occur by mid 2011. The total consideration will be borne pro-rata by Deutsche Brse and SIX Group.
Currently Deutsche Brse, SIX Group and Dow Jones & Company each hold 33.33% of STOXX. Following the closing of the transaction Deutsche Brse will control STOXX through ownership of 50% plus one share and SIX Group will hold 50% minus one share in STOXX. Deutsche Brse will fully consolidate STOXX.
The transaction is subject to approval by the German antitrust authority as well as further customary closing conditions. Closing of the transaction is expected latest in the first quarter of 2010. Deutsche Brse plans to finance the transaction out of equity. The preferred source of equity financing is the retention of earnings.
Following the exit of Dow Jones & Company, STOXX now has the opportunity to grow globally and diversify its index business. The innovative strength of STOXX, the excellent brand and the high quality of the indices will serve as the basis for further expansion. The transaction will allow both Deutsche Brse and SIX Group to significantly expand their position in the international index business, complementing their established DAX and SMI index families. hrough the combination of the index businesses as well as the infrastructures, the efficiency of index production will be increased. Direct access to the well known STOXX indices will also allow Deutsche Brse and SIX Group to utilize those indices to further strengthen their other joint activities, especially in the derivatives space within Eurex, as index-based products determine a major share of trading volumes in the derivatives markets. Consequently, the transaction is expected to create sustainable synergies in the long run.
As part of the transaction, SIX Group and Deutsche Brse intend to set up a new entity to perform index calculations, with SIX Group owning 50% plus 1 share. This entity is set to provide index calculation services, also for third-party customers; this will allow STOXX and its shareholders to capture operational synergies and to strive for globally leading industry standards n this field.
D.C.