As large educational publishers struggle to keep up with the rapid changes in both the K-12 and higher education markets, two of the largest companies in those spaces have agreed to merge. In an announcement made this morning, McGraw-Hill and Cengage said that they “have entered into a definitive agreement to combine in an all-stock merger on equal terms.”

Cengage said the deal is expected to close by early 2020, at which point the new company is expected to be named McGraw-Hill and will be led by Michael Hansen, currently the CEO of Cengage. The merger announcement comes against a backdrop of soft sales in both the K-12 and higher education markets. According to preliminary estimates released by the Association of American Publishers earlier this year, higher ed sales fell 7.2% in 2018 compared to 2017, while K-12 sales dropped 4.6%.

The merger will bring together two companies that publish materials for the K-12, higher education, English Language Teaching, professional, medical, and library reference markets. In prepared statements, executives from both companies emphasized that the merger will allow the new McGraw-Hill to invest in programs that will provide students with quality content, often through digital platforms, at affordable prices.

“Together, we will usher in an era in which all students can afford the quality learning materials needed to succeed—regardless of their socioeconomic status or the institution they attend,” said Hansen in a statement. Nana Banerjee, president and CEO of McGraw-Hill, added: “Combining our two companies and our complementary offerings will enable us to continue innovating. In this way we can continue to empower students and educators around the world with a wide choice of affordable, engaging course materials and advanced digital platforms to help them succeed throughout a lifetime of learning.”

Hansen also noted that the combination of the two companies will yield considerable financial savings that will allow the company to keep investing in new products. The companies hope to cut costs by $300 million over the next three years. Banerjee will continue to lead McGraw-Hill through the transition but will step aside when the deal is completed. The combined company’s leadership team is expected to be comprised of members from both McGraw-Hill and Cengage.

Based on the financial statements of Cengage and McGraw-Hill for the 12 months ending March 31, 2019, the combined company would have pro forma cash revenue of about $3.2 billion and cash EBITDA (earnings before interest, taxes, depreciation, and amortization) less pre-publication costs of $889 million, a figure that includes the pro forma impact of $300 million of cost synergies.