Murdoch puts Dow Jones up for sale
Saturday 22 August 2009
The Dow Jones Industrial Average, the most famous stock market index in the world, has been put up for sale.
Its owner, Rupert Murdoch, has hired the investment bankers Goldman Sachs to find a buyer for the historic business, which has been measuring the performance of US shares for 113 years.
In addition to the famous industrial average, Dow Jones Indexes calculates tens of thousands of indices, covering all aspects of the financial markets, and licenses its data to financial professionals. Analysts think that the business might fetch around $700m (£425m), helping to recoup some of the $5.7bn that Mr Murdoch spent two years ago on its parent company, Dow Jones & Co, owner of the the Wall Street Journal.
It was the founder of the Journal, Charles Dow, who first created an index to measure the performance of the biggest stocks trading on the New York Stock Exchange, for publication in his recently-established financial newspaper. Along with his business partner, statistician Edward Jones, he decided that calculating an average stock price was a good way to measure whether the market was going up or down – something that was, until then, not always clear.
The industrial average originally contained 12 stocks and was expanded to 30 companies in 1928. Only General Electric has been a Dow component throughout the index's entire history.
A joint venture with another company could be an alternative to an outright sale by News Corp, it was reported. It is also understood that a condition of the sale would be that the Dow Jones Industrial Average keeps its historic name, even though it may no longer be associated with Dow Jones.
Neither Mr Murdoch's company, News Corp, nor Goldman Sachs, the investment bank hired to sell the business, would comment on news of the sale.
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