US education groups McGraw-Hill and Cengage announce an all-stock merger

The McGraw-Hill Cos. signage is displayed outside of the company's headquarters in New York, U.S.

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Educational publishers McGraw-Hill Education and Cengage Learning on Wednesday announced plans for an all-stock merger.

The Wall Street Journal first reported news of the deal on Wednesday.

The merged company will be titled McGraw Hill and will hold about $3.16 billion in annual revenue, the Journal reported, adding that Cengage Learning Chief Executive Officer Michael Hansen will head the new firm

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 newspaper said.

The new entity would help both U.S.-based educational publishers to compete better as the rise of digital books and course materials pressures their businesses.

McGraw-Hill Education and Cengage did not immediately respond to Reuters requests for comments.

—CNBC contributed to this report.

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