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...

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