CME Group struck a deal last year to take control of the Dow Jones stock index business through a joint venture in which it controls 90% and previous owner News Corp 10%.

It has reached an agreement to contribute that joint venture to a new one with McGraw-Hill, which will put in its S&P Indices business.

This will create S&P/Dow Jones Indices, a business with annual revenue of more than $400 million. McGraw-Hill will own 73% of the JV, CME Group 24.4% through its affiliates, and Dow Jones 2.6%.

S&P/Dow Jones Indices is expected to be operational in the first half of 2012 - subject to regulatory approval and customary closing conditions - and will become part of the new McGraw-Hill Markets company.

As part of the deal, S&P/Dow Jones Indices will enter into a new license agreement whereby CME Group will pay S&P Indices a share of the profits of its equity product complex, which is its trading and clearing business for futures, swaps and options on futures.

In addition, the new agreement expands the products covered under the license to include swaps and extends CME Group's existing exclusive rights to the E-mini and other S&P indexed futures.

Alexander Matturri, executive managing director of S&P Indices, will be chief executive officer of the new firm and Lou Eccleston, president of McGraw-Hill Financial, will chair a seven-member board including five directors designated by McGraw-Hill and two by CME Group.

Says Matturri: "Those who rely on indices worldwide - from product issuers to exchanges to investors - will benefit from a deeper lineup of indices as well as a business model focused on innovation, performance and impact. Combining S&P Indices' institutional strength with CME Group's global exchange partnerships and Dow Jones Indexes' retail focus will optimise our ability to respond to the changing global environment with increased speed and efficiency."