May 1, 2019 / 10:26 AM / a year ago

U.S. education groups McGraw-Hill, Cengage plan all-stock merger

FILE PHOTO - Students study in the Reading Room at Suzzallo Library on the University of Washington campus in Seattle, Washington, U.S., September 20, 2018. REUTERS/Lindsey Wasson

(Reuters) - Educational publishers McGraw-Hill Education Inc and Cengage Learning Holdings II Inc are planning an all-stock merger, McGraw-Hill said on Wednesday.

The merged company will be named McGraw Hill and will hold about $3.16 billion in annual revenue, both companies had earlier told the Wall Street Journal, which first reported the deal.

If the deal stands through, the new company would become the second-largest provider of college textbooks and other higher-education materials in the United States, the report said.

Cengage Learning Chief Executive Officer Michael Hansen will head the new firm, McGraw-Hill confirmed.

The merged entity, which could be valued at about $5 billion, would help both U.S.-based educational publishers to compete better as the rise of digital books and course materials pressures their businesses.

Reporting by Maria Ponnezhath, additional reporting by Akshay Balan; Editing by Sherry Jacob-Phillips and James Emmanuel

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