The deal, done in partnership with Times Mirror, the US publishing company, gives Reed a new partner to explore on-line publishing opportunities in the burgeoning US market.
For tax reasons, the deal has been structured as an asset swap between Times Mirror and McGraw Hill, which is offering Shepard in exchange for the Times Mirror Higher Education Group.
Nigel Stapleton, Reed's deputy chairman, said yesterday the acquisition would be earnings-enhancing. "This was a good opportunity, and an excellent fit with Times Mirror."
Reed's subsidiary, Lexus Nexus, is a leading on-line publishing service, and will be able to handle the electronic aspects of the Shepard business. Times Mirror subsidiary Matthew Bender is a leader in CD-Rom and hard- copy publishing, which makes the two companies "logical partners", Mr Stapleton said.