McGraw-Hill Cos. Inc. said today it plans to split into two public companies, with one holding its Standard & Poor’s ratings and index businesses and the other holding its textbook publishing units.

The move is a major step toward the breakup and reorganization of the mini-conglomerate that was called for by activist investors last month in a meeting with McGraw-Hill directors.

The investors — Jana Partners LLC, a hedge fund, and the Ontario Teachers’ Pension Plan — argued that breaking up the company would increase its value to shareholders.

Terry McGraw, chairman and CEO of the company and a great-grandson of the founder, will lead McGraw-Hill Markets, which will hold the Standard & Poor’s credit rating business, S&P’s market index business and S&P Capital IQ, which provides data and analytical tools on companies and markets.

The company said it has started a search for a new CEO for McGraw-Hill Education, which will contain the textbook publishing and education units.

The breakup, which will be structured as a tax-free spinoff of the education business to McGraw-Hill shareholders, is expected to be completed by the end of 2012, the company said in a statement.

The markets businesses will have about $4 billion of revenues in 2011, and the education businesses will have about $2.4 billion in revenues, McGraw-Hill said.

McGraw-Hill said it will cut $1 billion from current corporate expenses and administrative and technology costs.