Cengage and McGraw-Hill Terminate Merger Agreement in Response to Antitrust Concerns

Cengage Learning Holdings II Inc. and McGraw-Hill Education Inc. mutually agreed to abandon their plans to merge after the Department of Justice informed the companies it had serious concerns that the proposed transaction, as structured, would harm competition. 

The merger would have combined the second and third largest publishers of textbooks in the United States in a market long dominated by three major textbook publishers.  “American students were our primary concern when evaluating the possible competitive effects of this deal,” said Assistant Attorney General Makan Delrahim of the department’s Antitrust Division.  “The decision to abandon this merger preserves competition in the market for textbook publishing, an important industry in the education sector.  Cengage and McGraw-Hill’s decision to abandon this merger also preserves innovation, as the two firms compete aggressively in the development of courseware technology.”

McGraw-Hill, headquartered in New York City, is the second-largest publisher of course materials in higher-education, which include physical textbooks, e-books, and digital courseware.  McGraw-Hill is a private company, owned by a private equity fund operated by Apollo Global Management LLC.

Cengage is a publicly-traded company that is headquartered in Boston, Massachusetts.  It is the third-largest publisher for higher-education course materials, which includes physical textbooks, e-books, and courseware.