Indiana Grain Company, LLC

Posted: 02/01/10

By: tomgrisafi

We at Indiana Grain are watching closely as the CME Group has emerged as the frontrunner in a bid to buy the Dow Jones & Company’s 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.

It now appears, however, 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 has a strong position in commodities, futures and options trading. CME already pays Dow Jones licensing fees allowing it to offer futures and options contracts based on the Dow industrials.

Of course, if CME owns the Dow, it wouldn’t have to pay the fee. Beyond that, an acquisition would also keep the DJIA from falling into the hands of competitors, as these types of agreements are exclusive.

Will the deal be done? Looks like a done deal already.