S&P Dow Jones Indices has announced that Corebridge Financial Inc. (CRBG) will replace Allete Inc. (ALE) in the S&P MidCap 400 index. The change will take effect prior to the market open on Wednesday, December 17.

Reason for the Change:
The removal of Allete is due to its pending acquisition by a consortium consisting of the Canada Pension Plan Investment Board (CPP Investments) and Global Infrastructure Partners (GIP). The deal is expected to close imminently, subject to final conditions.

Implications:

• Index Funds: Passive funds tracking the S&P MidCap 400 will be required to sell positions in Allete and purchase shares of Corebridge Financial to align with the index reconstitution.
• Corebridge Financial: The inclusion typically brings increased visibility and demand from institutional investors.
• Allete: Shares will cease to be part of the index upon the acquisition's completion.

This is a standard index rebalance prompted by corporate actions that change a company's public float or listing status.