Publisher Houghton Mifflin Co. said it agreed to buy Harcourt, the education arm of rival Reed Elsevier Plc for $4 billion.
Houghton Mifflin will acquire the Harcourt businesses, including Harcourt Education, Harcourt Trade and Greenwood-Heinemann. The deal consists of $3.7 billion in cash and $300 million in stock from Houghton Mifflin's parent company, Houghton Mifflin Riverdeep Group PLC.
The combined company will be led by Tony Lucki, the chairman and chief executive of Houghton Mifflin and the former CEO of Harcourt Education.
Harcourt publishes textbooks and educational supplements for students and adults. The combination of Houghton Mifflin's and Harcourt's businesses will offer customers more choices in educational publishing, Houghton Mifflin said.
The transaction, which is expected to be completed in late 2007 or early 2008, is subject to regulatory review.
Credit Suisse, Lehman Brothers and Citigroup have committed to provide the debt financing for the transaction