September 13, 2021

Cengage Merger Agreement

Filed under: Uncategorized — dpk3000 @ 9:00 pm

Tags: book sales, cengage, education, industry ratings, McGraw-Hill Education, Mergers & Acquisitions, Michael E. Hansen, Subscription, Textbooks, UNITED STATES NEW YORK, May 4, 2020 /PRNewswire/ — McGraw-Hill and Cengage announced today that they have mutually agreed to terminate their proposed merger of equals announced in May 2019. The decision was unanimously approved by the boards of Directors of McGraw-Hill and Cengage. The cancellation agreement does not provide for the payment of a break fee on either side. In separate statements, M-H and Cengage both cited the inability to agree with the government on the assets the companies had to divest in order for the merger to move forward as a reason to end the deal. The companies hoped to achieve annual savings of $300 million once the deal was reached. The “merger of equals” project announced in May 2019 is expected to be completed by March this year. But the process is not going as planned. Cengage said the deal announced in May 2019 was “rejected by mutual agreement due to a prolonged regulatory review process and the inability to accept a package of divestments with the U.S.

Department of Justice.” McGraw-Hill simply said that the graduation requirements could not be met. In a statement, Simon Allen, CEO of McGraw-Hill, said: “As the necessary divestitures have made the merger unprofitable, McGraw-Hill and Cengage have decided to terminate the merger agreement. This will allow each of us to focus on our own respective strategies, to the benefit of our owners, employees, customers and other stakeholders. I want to express my deepest esteem for the efforts and incredible commitment of McGraw-Hill`s employees over the past year, and especially in recent weeks, who have worked tirelessly to help educators transition to online learning.¬†Pursuant to the terms of the Merger Agreement, neither Cengage nor McGraw-Hill is responsible for payments made to the other party as a result of the termination of the Merger Agreement. The merger would have united the second and third largest textbook publishers in the United States in a market long dominated by three major textbook publishers. “U.S. students have been our primary concern in assessing the potential competitive effects of this agreement,” said Deputy Attorney General Makan Delrahim of the ministry`s cartel department. .

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