McGraw Hill and Cengage call off merger
McGraw Hill and Cengage have ‘mutually agreed to terminate their proposed merger’, according to a statement from McGraw Hill.
According to the Bookseller, Cengage said the decision was brought about by ‘a prolonged regulatory review process and the inability to agree to a divestitures package with the US Department of Justice’.
In a statement McGraw Hill CEO Simon Allen said, ‘Because the required divestitures would have made the merger uneconomical, McGraw-Hill and Cengage have decided to terminate the merger agreement. This will allow each of us to focus on our respective stand-alone strategies for the benefit of our owners, employees, customers and other stakeholders.’
Cengage CEO Michael Hansen said, ‘Although we are disappointed that we were unable to finalize the merger, the opportunity ahead remains significant. The COVID-19 crisis has accelerated the need for students to learn wherever they are. On a standalone basis, Cengage is very well-positioned to continue to support the transition to digital and help students save significant money.’
The companies had previously estimated they would save US$285–$370 million (A$407–$529m) annually over three years across McGraw-Hill and Cengage after the proposed merger.
The intended merger was announced in May 2019. It was delayed until September 2020 as a result of a US Department of Justice review. In the UK the Competition and Markets Authority investigated the merger earlier this year and found that it ‘may be the case that this merger has resulted or may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom’.
The McGraw Hill statement said the decision not to merge was unanimously approved by the Boards of Directors of both companies and that the termination agreement ‘foresees no payment of a break fee on either side’.
Category: International news