Education group urges U.S. Justice Department to block textbook merger

WASHINGTON (Reuters) - An education group seeking to increase access to college textbooks and research materials on Wednesday asked the U.S. government to block the proposed merger of textbook publishers McGraw-Hill Education Inc and Cengage Learning Holdings II Inc.

The proposed merger “will significantly decrease competition in a market already rife with anti-consumer behavior,” the Scholarly Publishing and Academic Resources Coalition (SPARC) said in a filing with the Justice Department’s Antitrust division.

The merger announced in May between Cengage and McGraw-Hill, which is owned by Apollo Global Management LLC APO.N, would reduce the number of major textbook publishers to three from four. Publishers Pearson and Wiley, hold an estimated 40 percent and 7 percent of the market, respectively, sources close to the companies told Reuters. [nL2N24R1JT]

SPARC advocates the open sharing of research and educational material. Its members include colleges and universities from around the United States, such as Harvard University, Iowa State University and the Massachusetts Institute of Technology, according to its website.

Student consumers would face “irreparable harm” if the merger moves forward and the “merger must be blocked in its entirety,” SPARC said.

A representative for the two companies said Cengage and McGraw-Hill were working closely with the Justice Department and were “confident that the transaction will benefit our customers and create more affordable options for students.”

The companies said they expect the deal to close early next year.

Reporting by Bryan Pietsch; editing by Jonathan Oatis