McGraw-Hill Companies Inc said on Monday it would separate into two public companies, one focused on global markets and the other on education, pleasing investors who had been pushing the company to split its businesses.

Last month, McGraw-Hill's directors and executives met with Jana Partners LLC, a hedge fund, and the Ontario Teacher's Pension Fund to hear their arguments that the company should be broken up.

McGraw-Hill will split into McGraw-Hill Markets, which would include its Standard & Poor's ratings business, and McGraw-Hill Education, which will contain the textbook publishing and education units.

The break-up, which will be structured as a tax-free spin-off of the education business to McGraw-Hill shareholders, is expected to be completed by the end of 2012.

The company said McGraw-Hill Markets serves customers in more than 150 countries and expects revenues of approximately $4 billion in 2011.

The company is also searching for a chief executive for McGraw-Hill Education, which expects revenue of about $2.4 billion for the year.

Evercore and Goldman Sachs are advising on the spinoff.

McGraw-Hill said it is also looking to make cuts from $1 billion in corporate expense and administrative and technology costs.

The company said it would also speed up the pace of share repurchases to a total of $1 billion for 2011.

Shares of the company closed at $38.72 on Friday on the New York Stock Exchange.

(Reporting by Jochelle Mendonca in Bangalore; Editing by Sriraj Kalluvila)