The S&P 500 and Dow Jones industrial average are now officially under one single company following a merger that brought together two of the largest indexing names into one unit that last year had total revenue of $421 million.

The new entity—S&P Dow Jones Indices—is 73 percent owned by McGraw-Hill, the parent of Standard & Poor’s. CME Group, which owns most of Dow Jones indexes, will hold a 24.4 percent stake in the venture, while Dow Jones & Co. Inc. will hold 2.6 percent stake, the companies said in a joint press release today.

The merger first took shape last fall, and finally became official today. As part of the joint venture, CME will pay S&P Dow Jones Indices a share of the profits of CME group’s equity index product complex, and it also expands CME’s licensing privileges.  McGraw-Hill will officially split its operations into two separate public companies, one focused on financial markets and the other on education.

Putting the two widely used benchmarks under the same ownership umbrella potentially means they would have a competitive edge over other indexing-industry competitors such as Russell or MSCI – the latter which was outbid by CME last year in its attempt to acquire Dow Jones Indexes from Dow Jones & Company Inc.

The transaction is a reflection of the growing importance of index investing. Indexing has been growing quickly in recent years as investors turn to index-based strategies to access different slices of the financial markets, using vehicles ranging from ETFs to futures.

The new unit calculates more than 830,000 indexes, and benchmarks some 575 ETFs with $387 billion in assets. All in all, the S&P Dow Jones Indices “serves as the DNA for $1.5 trillion of the world’s indexed assets,” the companies said.

Alexander Matturri, executive managing director of S&P Indices, will be chief executive officer of the operation.

McGraw-Hill expects that the transaction will increase its earnings immediately, citing three reasons why the indexing unit will drive its future profit growth:

• Increasing revenue through international and asset-class expansion, new product development, enhanced market data offerings and increased cross-selling opportunities
• Achieving cost savings and accelerating time to market by leveraging technology, data procurement, other back-office functions and McGraw-Hill Markets’ infrastructure
• Reducing capital requirements and generating free cash flow for parent companies.