Hasbro approaches Mattel with a takeover offer

HasbroHasbro has approached fellow toy giant Mattel with a takeover offer. The potential takeover bid which would see Hasbro’s My Little Pony and Transformers brands join forces with Mattel’s Barbie and Hot Wheels toys was first reported on November 10.

Mattel

According to a well-known analyst, an amalgamation between Hasbro and Mattel would control approximately 25% of the worldwide mass-market for traditional toys as well as significant portions of the US and domestic mass markets that comes to 30% and 40% respectively.

“This merger [between Hasbro and Mattel] has been tried several times in the past and regulations were a problem, anti-trust was a problem,” the analyst Johnson has reportedly said.

“I would point out that, right now, there are toy companies that are more competitive than we’ve ever had before. You’ve got LEGO, Spin Master, Just Play and MGA Entertainment. In fact, of the top-five toy items or toy lines out on the market right now, none of them are Hasbro or Mattel. One could make the point that there are better competitors out there now, and that could be a counter-balance,” he added.

In a BMO Capital Markets release, Johnson estimated that Mattel’s power brands viz Barbie, Fisher-Price, Thomas, Hot Wheels and American Girl could be worth more than US$8 billion.

After Toys “R” Us filed for bankruptcy protection in the US and Canada in September, Mattel had reported that its worldwide net sales declined by 13% to US$1.56 billion in Q3, while worldwide gross sales also fell by 13% to US$1.71 billion.

Following these results, Mattel announced its quarterly dividend will be suspended beginning in Q1 2018 in an effort to increase financial flexibility, strengthen the balance sheet and facilitate strategic investments.