Saturday, 18 November, 2017

Toy Company Rivals Hasbro And Mattel May Soon Become One

Barbie Approaches Her 50th Birthday A merger of this size wouldn't be child's play but could be beneficial for both companies
Juana Turner | 12 November, 2017, 02:20

- Hasbro Inc (HAS.O) has made an approach to acquire rival Mattel Inc (MAT.O), a source familiar with the matter said on Friday, the latest attempt to combine the two biggest US toymakers in more than two decades.

The terms of any possible deal "couldn't be learned", the WSJ said, and it is not clear if the approach will move forward.

Mattel, the maker of Barbie and Hot Wheels, has been struggling to boost sales. A combined company would have more pricing power to negotiate with entertainment studios over TV and movie franchises.

Shares in Mattel reacted positively to the news as they shot up by 24% during Friday afterhours trading.

As the Wall Street Journal reports, long-time rivals Hasbro, Inc. The toymaker's stock has also taken a hit, falling 52 percent over the past year while Hasbro's shares have increased 8 percent.

Hasbro's stock rose 18 per cent this year, and the company has a market value of $11 billion - more than twice that of Mattel.

Mattel has pointed to that bankruptcy as a reason for weak sales.

One analyst in the toy industry said that both companies would enjoy benefits from merging, but stockholders at Mattel may oppose such a deal that valued their company on a recently depressed share price. Last month, Mattel said the toy retailer's bankruptcy - a result of shifting consumer preference for electronic toys and e-commerce - was a factor in the company's third quarter results and Mattel's sales have fallen 13 percent since previous year.

The other more ensuring detail is Mattel's stock price is way down nearly 50% compared to this time previous year.

In 2014, Hasbro held merger discussions with DreamWorks Animation SKG Inc, the studio behind "Shrek", but DreamWorks was subsequently bought by Comcast Corp (CMCSA.O).

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