Textbook giant McGraw-Hill Education said Wednesday it plans to combine with rival Cengage Learning in an all-stock merger.

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 is completed, 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 US-based educational publishers to compete better as the rise of digital books and course materials pressures their businesses.

With Reuters