McGraw-Hill Will Divide in Two Following Jana Challenge

McGraw-Hill Cos. will split into two companies focusing on global markets and textbook publishing, under pressure from activist investor Jana Partners LLC and after scrutiny of ratings by its Standard & Poor’s unit.

The transaction may be completed by the end of 2012 through a tax-free spinoff of the education unit, the New York-based company said today in a statement. McGraw-Hill Markets will include S&P and J.D. Power and Associates and be led by Chief Executive Officer Harold “Terry” McGraw III.