On May 28, 2008, the Department of Justice blocked a proposed $750 million acquisition of Houghton Mifflin Harcourt Publishing Company’s College Division (“HM College”) by Cengage Learning, Inc (“Cengage”). The DOJ required the divestiture of Cengage’s assets related to the textbooks and education materials of 14 of its college level courses. The textbooks ranged from topics on foreign languages to business.
The DOJ maintains that the transaction without a divestiture would lead college students to pay higher prices for textbooks and/or suffer lower quality material. Cengage, based in Connecticut, is the second largest college textbook publisher in the United States, while HM College, a subsidiary of Dublin based Education Media and Publishing Group Ltd., is the fifth largest college textbook publisher. According to the DOJ, both companies compete in the development and sale of textbooks and other education material related to the books. As required by the Tunney Act, the proposed settlement, along with the Department’s competitive impact statement, will be published in the Federal Register.