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Nasdaq to Merge Index, Data Units in Reorganization

Nasdaq OMX Group Inc. (NDAQ), America’s second-largest equity market operator, said it merged its data and index businesses as part of a reorganization.

The Global Information Services unit, which has been in operation since Jan. 1, will be headed by executive vice president John Jacobs and comprise 20 percent of Nasdaq’s total annual revenue, the New York-based company said in an e-mailed statement. The merger will enable it to “leverage the recent technology investments,” Jacobs said.

Nasdaq’s data division provides market information for 2.5 million people in 83 countries. There are more than 7,000 products based on Nasdaq indexes, with almost $1 trillion in notional value, the operator said. The company, seeking to expand its business beyond securities transactions, said this month it’s combining two technology units that provide advisory services to exchanges and research on company shareholders.

“This is part of a broader shift in how Nasdaq will report its business segments,” Matthew Heinz, an analyst at Stifel Nicolaus & Co. who has a buy rating on Nasdaq, said in an e- mail. “It will be a positive for the stock as investors can more clearly see the margin profile of its various business units.”

Nasdaq in December agreed to buy Thomson Reuters Corp. units that provide investor and public relations and multimedia services for $390 million in cash as it seeks to diversify. The company also purchased a 25 percent stake in The Order Machine, a Dutch alternative securities-trading system focused on stocks and equity derivatives.

The computerized infrastructure of American capital markets has come under increased scrutiny after a series of breakdowns in the past year, including Nasdaq OMX’s mishandling of Facebook Inc.’s initial public offering. Bats Global Markets Inc. and Knight Capital Group Inc. also experienced mishaps.

Bloomberg LP, the parent of Bloomberg News, competes with Thomson Reuters in selling financial and legal information and trading systems.

To contact the reporter on this story: Leslie Picker in New York at lpicker2@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

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