Leaders in risk management solutions, portfolio management tools and equity
performance indices join forces to create a preeminent provider of investment
decision support tools
NEW YORK–(Business Wire)–
MSCI Inc. (NYSE: MXB), a leading global provider of investment decision support
tools, and RiskMetrics Group, Inc. (NYSE: RISK), a leading provider of risk
management and corporate governance products and services to the global
financial community, jointly announced today that they have entered into a
definitive merger agreement whereby MSCI will acquire RiskMetrics in a cash and
stock transaction valued at $21.75 per share based on MSCI`s closing price of
$29.98 per share on Friday, February 26, 2010, or approximately $1.55 billion.

The transaction will unite two market leaders and powerful brands including
MSCI, Barra, and RiskMetrics, to create a global, research-based, client-centric
organization, dedicated to delivering world class investment decision support
tools to financial institutions worldwide. The combined company would have
approximately $750 million of revenues and approximately 2,000 employees across
20 countries.

MSCI`s offer consists of $16.35 in cash and 0.1802 shares of MSCI per share of
RiskMetrics. The transaction is subject to customary closing conditions,
including approval by the shareholders of RiskMetrics, the receipt by MSCI of
the proceeds of the debt financing for the transaction, antitrust clearance and
other customary regulatory approvals. The transaction is currently expected to
close in MSCI`s third fiscal quarter of 2010.

The transaction is expected to be financed by existing cash and proceeds of
debt. MSCI has received a commitment letter from Morgan Stanley Senior Funding,
Inc. for senior secured credit facilities aggregating up to $1.375 billion,
which would be available, subject to customary conditions, to fund the cash
consideration in the acquisition, the refinancing of existing senior secured
credit facilities of MSCI and RiskMetrics and the ongoing working capital needs
of MSCI and its subsidiaries following the transaction.

“This deal marks a significant milestone in our effort to become the leading
provider of investment decision support tools,” said Henry Fernandez, Chairman
and CEO, MSCI Inc. “The combined scale, complementary product capabilities and
clients and extensive geographic footprint of MSCI and RiskMetrics will drive
significant cost-saving synergies and revenue opportunities. RiskMetrics is the
perfect match for MSCI and we are very excited to welcome them to the MSCI
family.”

“One of the key trends that has been driving the growth of our analytics
business is the increased need to understand, measure, manage, and report risk.
The combination of MSCI`s expertise in portfolio equity risk models and
analytics, and RiskMetrics` powerful multi-asset class risk management platform
creates a comprehensive, best of breed portfolio risk management offering, which
will provide our clients with a seamless view of risk across the front and
middle office,” added Mr. Fernandez.

“This is a truly powerful combination. This transaction with MSCI will benefit
our investors, clients and employees,” said Ethan Berman, Chief Executive
Officer of RiskMetrics Group. “Managing risk is critically important in today`s
financial markets. Our clients will greatly benefit from the combined company`s
expanded product range and enhanced risk management offerings.”

The combined company will have an attractive growth profile with a diversified
revenue base, consisting predominantly of recurring revenues. The strong cash
flow and financial position of the combined company should also facilitate
further investment throughout the business in terms of products, people and
processes, reinforcing the company`s well-established position within and across
its clients` investment processes. In addition, the transaction is expected to
accelerate MSCI`s internal investment spending program, including the build-out
of MSCI`s portfolio management tools for fixed income managers and further
investment in financial indices, and creates the opportunity for an estimated
USD 50 million in cost synergies from duplicate areas such as platforms,
services and offices.

Approvals and Anticipated Closing

The Boards of Directors of both companies have approved the transaction. The
closing of the merger is expected to occur in MSCI`s third fiscal quarter of
2010, subject to certain customary conditions, including approval by
RiskMetrics` stockholders, the receipt by MSCI of the proceeds of the debt
financing for the transaction, and the receipt of antitrust clearance and other
customary regulatory approvals. In connection with the transaction, Ethan
Berman, the Chief Executive Officer of RiskMetrics Group, and certain other
RiskMetrics shareholders, have entered into a voting agreement with MSCI
pursuant to which they have agreed to vote, in the aggregate, approximately 54%
of the outstanding RiskMetrics shares in favor of this transaction.

Advisors

Morgan Stanley served as MSCI`s financial advisor, Davis Polk & Wardwell LLP
provided legal counsel to MSCI and UBS provided a fairness opinion to MSCI`s
Board of Directors. Morgan Stanley is also providing committed financing in
connection with the transaction. RiskMetrics` financial advisor was Evercore
Group, L.L.C., and it was advised on legal matters by Kramer Levin Naftalis &
Frankel LLP.

Conference Call Information

MSCI and RiskMetrics will host a webcast for investors at 9:00 am Eastern Time
on March 1, 2010. To hear the live event, visit the investor relations sections
of either of the two companies` websites, http://ir.msci.com and
http://investor.riskmetrics.com or dial 1-800-776-0420 within the United States.
International callers dial 1- 913-312-1393. Please visit http://ir.msci.com in
order to download the accompanying presentation document for the call.

An audio recording of the conference call will be available on MSCI`s and
RiskMetrics` websites approximately two hours after the conclusion of the live
event and will be accessible through March 8, 2010. To listen to the recording,
visit the investor relations sections of either of the two companies` websites,
http://ir.msci.com and http://investor.riskmetrics.com or dial 1-888-203-1112
(passcode: 2487893) within the United States. International callers dial
1-719-457-0820 (passcode: 2487893).

About RiskMetrics

RiskMetrics is a leading provider of risk management and corporate governance
products and services to the global financial community. By bringing
transparency, expertise and access to the financial markets, RiskMetrics helps
investors better understand and manage the risks inherent in their financial
portfolios. RiskMetrics solutions address a broad spectrum of risk across
clients’ financial assets. Headquartered in New York with 20 global offices,
RiskMetrics serves some of the most prestigious institutions and corporations
worldwide.

About MSCI

MSCI Inc. is a leading provider of investment decision support tools to
investment institutions worldwide. MSCI Inc. products include indices and
portfolio risk and performance analytics for use in managing equity, fixed
income and multi-asset class portfolios.

The company`s flagship products are the MSCI International Equity Indices, which
include over 120,000 indices calculated daily across more than 70 countries, and
the Barra risk models and portfolio analytics, which cover 58 equity and 49
fixed income markets. MSCI Inc. is headquartered in New York, with research and
commercial offices around the world. MXB#IR

Important Information for Investors and Shareholders

This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities or a solicitation of any vote or approval. MSCI
will file with the Securities and Exchange Commission (“SEC”) a registration
statement on Form S-4 that will include a proxy statement of RiskMetrics that
also constitutes a prospectus of MSCI. MSCI and RiskMetrics also plan to file
other documents with the SEC regarding the proposed transaction. A definitive
proxy statement/prospectus will be mailed to stockholders of RiskMetrics.
INVESTORS AND SECURITY HOLDERS OF MSCI AND RISKMETRICS ARE URGED TO READ THE
PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT WILL BE FILED WITH THE SEC
CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATIONABOUT THE PROPOSED TRANSACTION.

Investors and stockholders will be able to obtain free copies of the proxy
statement/prospectus and other documents containing important information about
MSCI and RiskMetrics, once such documents are filed with the SEC, through the
website maintained by the SEC at http://www.sec.gov. Copies of the documents
filed with the SEC by MSCI will be available free of charge on MSCI`s internet
website at www.mscibarra.com or by contacting MSCI`s Investor Relations
Department at 866-447-7874. Copies of the documents filed with the SEC by
RiskMetrics will be available free of charge on RiskMetrics` internet website at
www.riskmetrics.com or by contacting RiskMetrics` Investor Relations Department
at 212-354-4643

MSCI, RiskMetrics, their respective directors and certain of their executive
officers may be deemed to be participants in the solicitation of proxies from
the stockholders of RiskMetrics in connection with the proposed transaction.
Information about the directors and executive officers of RiskMetrics is set
forth in its proxy statement for its 2009 annual meeting of stockholders, which
was filed with the SEC on April 29, 2009. Information about the directors and
executive officers of MSCI is set forth in its proxy statement for its 2010
annual meeting of stockholders, which was filed with the SEC on February 23,
2010. Other information regarding the participants in the proxy solicitation and
a description of their direct and indirect interests, by security holdings or
otherwise, will be contained in the proxy statement/prospectus and other
relevant materials to be filed with the SEC when they become available.

Forward-Looking Statements

This document contains forward-looking statements. These statements relate to
future events or to future financial performance and involve known and unknown
risks, uncertainties and other factors that may cause MSCI`s, RiskMetrics and
the combined company`s actual results, levels of activity, performance, or
achievements to be materially different from any future results, levels of
activity, performance, or achievements expressed or implied by these
forward-looking statements. In some cases, you can identify forward-looking
statements by the use of words such as “may,” “could,” “expect,” “intend,”
“plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or
“continue” or the negative of these terms or other comparable terminology. You
should not place undue reliance on forward-looking statements because they
involve known and unknown risks, uncertainties and other factors that are, in
some cases, beyond MSCI`s, RiskMetrics and the combined company`s control and
that could materially affect actual results, levels of activity, performance, or
achievements. Such risks, uncertainties and factors include, but are not limited
to: the risk that a condition to closing of the proposed merger may not be
satisfied; the risk that a regulatory approval that may be required for the
proposed merger is not obtained or is obtained subject to conditions that are
not anticipated; the failure to consummate or delay in consummating the proposed
merger for other reasons; the combined company`s ability to achieve the
synergies and value creation contemplated by the proposed merger; the combined
company`s ability to promptly and effectively integrate the businesses of
RiskMetrics and MSCI; and the diversion of management time on merger-related
issues.

Other factors that could materially affect MSCI`s, RiskMetrics and the combined
company`s actual results, levels of activity, performance or achievements can be
found in MSCI’s Annual Report on Form 10-K for the fiscal year ended November
30, 2009 and filed with the SEC on January 29, 2010, in RiskMetrics` December
31, 2009 Annual Form 10-K which was filed with the SEC on February 24, 2010 and
in their respective quarterly reports on Form 10-Q and current reports on Form
8-K. If any of these risks or uncertainties materialize, or if MSCI`s or
RiskMetrics` underlying assumptions prove to be incorrect, actual results may
vary significantly from what MSCI or RiskMetrics projected. Any forward-looking
statement in this release reflects MSCI`s or RiskMetrics` current views with
respect to future events and is subject to these and other risks, uncertainties
and assumptions relating to MSCI`s or RiskMetrics` operations, results of
operations, growth strategy and liquidity. MSCI and RiskMetrics assume no
obligation to publicly update or revise these forward-looking statements for any
reason, whether as a result of new information, future events, or otherwise.

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For further information:
MSCI, New York
Edings Thibault, +1-212-804-5273
or
RiskMetrics, New York
Sarah Cohn, +1-212-354-4643
or
For media enquiries:
Abernathy MacGregor, New York
Steve Bruce, +1-212-371-5999
or
Penrose Financial, London
Sally Todd, +44 20 7786 4888

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