Houghton Mifflin to buy Harcourt

Educational textbook publisher Houghton Mifflin Co. agreed to buy the remaining U.S. units of scientific and medical publisher Reed Elsevier for $4 billion in cash and stock, creating what could become the largest K-12 publisher in the country in terms of market share.

The Boston-based division of Houghton Mifflin Riverdeep Group will pay $3.7 billion in cash and $300 million in common stock of its parent company to acquire Harcourt Education, Harcourt Trade and Greenwood-Heinemann from Dutch-Anglo publisher Reed Elsevier.

Houghton Mifflin is among four companies controlling about 90% of the K-12 publishing industry in the nation, said Drew E. Corum, an analyst at Stifel Nicolaus & Co. The combined company would account for 35% to 40% of the market, Crum said.