Updated from 8:18 a.m. EDT

Anglo-Dutch publishing company

Reed Elsevier

said Friday it agreed to buy

Harcourt General

(H) - Get Report

, the world's largest publisher of educational books, for $4.45 billion in cash.

Reed Elsevier, which is 47.1% owned by

Elsevier NV

(ENL)

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, said it would pay $59 a share in cash for Chestnut Hill, Mass.-based Harcourt. The company also agreed to assume $1.2 billion of Harcourt debt. The deal represents a 13.25% premium over Harcourt's Thursday closing price of $52.10.

Elsevier said it will sell some of Harcourt's businesses to Canada's

Thomson Corp.

for $2.06 billion.

Shares in both companies jumped on the news, with Elsevier's shares finishing Friday regular trading up $2.06, or 9%, at $25.38, while Harcourt shares rose $4.71, or 9%, to close at $56.81.

Friday's deal is a significant part of Reed Elsevier's previously announced restructuring plan, the company said in a statement.

The deal will lead to strong growth in the publishing company's efforts to establish itself online, according to a company statement.

"The combination of our businesses provides an exceptional platform for growth, focused on new and demonstrably superior Internet information services and solutions," said Crispin Davis, Reed Elsevier's chief executive, in a statement.

Once the deal is complete, Reed Elsevier will own Harcourt's scientific, technical and medical book publishing businesses, as well as its unit that publishes books and testing materials for grades kindergarten through high school. In the year ending Oct. 31, these businesses had sales of $1.4 billion and operating profits of $297 million.

The deal is expected to close in the first quarter of 2001.