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CAMBRIDGE, MA. - The Learning Company (NYSE: TLC) announced today that it has entered into a definitive agreement with Mattel, Inc. (NYSE: MAT) for the merger of the two companies. Based on the closing price of Mattel common stock on Friday, December 11, 1998, the transaction would be valued at approximately $3.8 billion.

In the proposed transaction, each outstanding share of Learning Company common stock will be exchanged for $33.00 of Mattel common stock as long as the average price of Mattel common stock for certain trading days during the twenty trading-day period ending five days prior to the closing is between $27.50 and $33.00. The exchange ratio is fixed at 1.20 at or below $27.50 and 1.0 at or above $33.00. The $33.00 price represents approximately a 16% premium over the closing price of The Learning Company stock on December 11, 1998.

The closing of the transaction is subject to certain conditions, including expiration of applicable waiting periods under pre-notification regulations and the approval of stockholders of each company. Mattel's and The Learning Company's Board of Directors have approved the transaction and intend to recommend that stockholders approve the transaction. Thomas H. Lee Company, Bain Capital, Inc., and Centre Partners LLC, each of which are significant stockholders of The Learning Company, have agreed to vote in favor of the transaction. The transaction is expected to close in March or April 1999 and will be accounted for using the pooling-of-interest method of accounting.

Upon the closing of the transaction, each of the exchangeable non-voting shares of The Learning Company's Canadian subsidiary, SoftKey Software Products, Inc. will become exercisable for one share of Mattel common stock multiplied by the exchange ratio. The transaction is intended to be non-taxable to holders of Learning Company common stock and exchangeable shares.

The Company's headquarters are located at One Athenaeum Street, Cambridge, Mass. 02142; telephone 617-494-1200; fax 617-494-1219. The corporate Web site is located at www.learningco.com.


The Learning Company Editorial Contact
Susan Getgood
Phone: 617-494-5674
Fax: 617-494-5733
e-mail: sgetgood@learningco.com


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