Cengage and McGraw-Hill Announce Intention to Merge

In 2019, Cengage and McGraw-Hill Education, which are two of the three largest college textbook publishers, announced their intention to merge into a unified company, which would carry the McGraw-Hill Brand.

This proposed merger has not yet been finalized, but does have major implications for the educational book market. If Cengage and McGraw-Hill merge into a new company, they would only have a single rival – Pearson.

The merger between Cengage and McGraw-Hill has raised some eyebrows, particularly among Department of Justice regulators who are concerned about potential “duopoly” concerns – that the dominance of the new McGraw-Hill and Pearson would result in higher prices and other such anti-competitive issues among textbook publishers.

When Will Cengage And McGraw-Hill Complete Their Merger?

The Cengage and McGraw-Hill merger does not have a solid date as of yet, though it was previously announced that it could occur as soon as Q1 2020.

However, the success of the merger depends on whether or not the Department of Justice opens up an investigation into the proposed merger – which is very possible, considering its potential to eliminate competition in the college textbook market.

Many institutions including SPARC are opposing this merger, so it’s definitely possible that it may be delayed as regulators begin to explore the potential anti-competitive implications of a merger between Cengage and McGraw-Hill.

What Does This Mean For College Students?

For college students, the merger of McGraw-Hill and Cengage doesn’t mean much – yet. However, if the merger does go through, there will be much less competition in the world of college textbook publishing – which could mean higher prices for textbooks.

Indeed, even in the current educational publishing landscape, the cost of college textbooks has risen 146% since 2000. In contrast, the US inflation rate was around 2% from the period of 2000-2019.

In documents and press materials for the merger, McGraw-Hill and Cengage have also pledged to focus more closely on “digital content.” Digital educational materials have already received a lot of criticism from college students, who claim:

  • Expiring access codes from online platforms destroy the used book market
  • Digital content cannot be resold at the end of the course, or even kept for future reference if the access code has an expiration date
  • Automatic billing and digital materials harm the ability to “price shop”
  • Digital materials, though nearly free to distribute, are still priced at similar costs compared to printed materials

This means that, should the merger go through, it’s possible that prices for textbooks and educational materials may go up – and a further emphasis on digital content could further harm college students financially.

The Future of the Cengage & McGraw-Hill Merger Remains Uncertain

For now, there’s no way to tell if this merger will go through. If there are no major issues raised by the DOJ, it may proceed as planned – but action by grassroots activists and college students could cause delays.

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