Toy maker Mattel Inc. announced plans to acquire educational software giant The Learning Company for $3.8 billion in stock. The marriage of the traditional-toy and educational-software empires, announced Dec. 14, signals a new and higher level of consolidation in the educational software industry.
The Learning Company, with about $850 million in projected revenue for 1998, is considered the world’s second-largest consumer software company after Microsoft. The company produces such titles as Reader Rabbit and Carmen Sandiego. In June, The Learning Company acquired rival Broderbund Software for about $420 million in stock.
With its toy sales slumping, Mattel hopes to expand into the fast-growing educational software market. According to analysts, the move by Mattel–maker of Barbie dolls, Fisher-Price toys and Hot Wheels–confirms the growing importance of educational software to the toy market’s future.
The deal, which is subject to regulatory and stockholder approval, is expected to close in March or April.