FTSE Group and TMX Group will combine their fixed-income index businesses into a joint venture called FTSE TMX Debt Capital Markets, according to an agreement announced Wednesday.
The new entity will be the third-largest fixed-income exchange-traded fund index provider globally, according to a joint news release. The indexes are currently used as benchmarks for more than $1 trillion in fixed-income assets.
The transaction is expected to close in the second quarter. FTSE will own a 75% stake in the joint venture and TMX Group, 25%. TMX Group also will receive C$112.2 million (US$109.4 million), which will be funded from London Stock Exchange Group cash. FTSE is part of the LSEG.
According to the news release, the joint venture will enable more rapid global expansion for TMX Datalinx, the information service division of TMX Group, and increase FTSE's profile in North America.
There are currently more than 600 debt capital market indexes available between the two companies, and it is expected to triple in the next five years, said Carolyn Quick, TMX spokeswoman. The Canadian indexes will be branded FTSE TMX, and the global indexes as just FTSE, Ms. Quick added.
The business will be jointly headquartered in Toronto and London, and combine PC-Bond, TMX's fixed-income index business, with FTSE fixed-income indexes.