A joint venture has been agreed to by CME Group and McGraw-Hill that will bring together the S&P 500 index and the Dow Jones Industrial Average in the same company, according to news reports.

An agreement was reached last week after more than a year of discussions regarding the venture.

The alignment of two of the world's most influential financial indices within one company could have huge implications in the financial industry. Under terms of the agreement, McGraw-Hill will control 73 percent of the venture. CME group will control 24.4 percent, and Dow Jones will own 2.6 percent.

The new company will be called S&P/Dow Jones Indices. Revenues are expected to be $400 million initially and rise to $435 million by the end of 2012. The new company will serve as a benchmark for more than $6 trillion in financial assets, giving it enormous clout within the financial industry.

Opportunities within the index industry have been on the rise in recent years as investors have become more interested in commodities and other asset classes. Emerging markets have also contributed to this growth.

San Diego joint venture attorneys noted from news reports that the companies complement one another thanks to their related strengths. S&P Indices is focused primarily on institutional investor opportunities, while the Dow Jones focuses strongly on opportunities for investors.

The deal produces a single company from a business relationship between the two companies that dates back to 1982, and the combination of the two companies should yield greater gains than the companies would have experienced separately.

Source: Financial Times "Dow Jones and S&P owners seal joint venture" Nov. 4, 2011