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Reto Francioni, Chief Executive Officer of Deutsche Boerse

Deutsche Börse and Six to become sole shareholders of Stoxx

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Deutsche Börse and Six Group have signed definitive agreements under which they will become sole operators of the Swiss index provider Stoxx for a total consideration of EUR206.1m in cash, comprised of EUR132.1m for Dow Jones’s one-third stake and EUR74m for certain intellectual property rights acquired by Stoxx.

There will be the opportunity for Dow Jones to earn up to a further EUR29.0m depending on business performance, with any payment to occur by mid 2011. The total consideration will be borne pro-rata by Deutsche Börse and Six Group.

Currently Deutsche Börse, Six and Dow Jones each hold 33.33 per cent of Stoxx.

Following the closing of the transaction Deutsche Börse will control Stoxx through ownership of 50 per cent plus one share and Six will hold 50 per cent minus one share in Stoxx. Deutsche Börse 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 Börse 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, Stoxx now has the opportunity to grow globally and diversify its index business. The transaction will allow both Deutsche Börse and Six to expand their position in the international index business, complementing their established DAX and SMI index families.

Through 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 Börse and Six Group to use 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.

As part of the transaction, Six and Deutsche Börse intend to set up a new entity to perform index calculations, with Six Group owning 50 per cent plus one share. This entity is set to provide index calculation services, also for third-party customers.

“This consolidation step in the area of index and market data complements our organic growth initiatives across the group. A majority in Stoxx provides us with the opportunity to capitalise on a strong index and data business also in other areas across the group. Therefore, we believe the transaction creates sustainable value for our customers and shareholders,” says Reto Francioni (pictured), chief executive of Deutsche Börse.

Urs Rüegsegger, chief executive of Six Group, says: "We are convinced that Stoxx is about to become a truly global provider and leader in the indexing industry. Together with our partner Deutsche Börse we will now be able to focus on geographical and product-driven expansion and strengthen our market position in the ETF and derivative space and diversify the revenue streams."

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