Published: Sun, November 12, 2017
Markets | By Rosalie Gross

Toy Company Rivals Hasbro And Mattel May Soon Become One

Toy Company Rivals Hasbro And Mattel May Soon Become One

A new report claims that Hasbro Inc. has made a takeover offer for its rival, Mattel Inc., although details surrounding the offer are now unknown.

A tie-up would create a toy powerhouse, uniting Hasbro's brands, which also include My Little Pony, with Mattel's Barbie dolls and Hot Wheels toys. A combined company would have more pricing power to negotiate with entertainment studios over TV and movie franchises.

The news first broke courtesy of the New York Times, with the outlet revealing that the approach from Hasbro was made in recent months.

Mattel's shares were up 24.74 per cent in after-hours trading to $18.25, while Hasbro's were up more than three per cent to around $94. Hasbro shares were up 3.3%.

Talks that the two may join forces has been long rumored, as Mattel's stock has fallen a significant 52 percent over the past year, leaving its market value at $5 billion.

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The bankruptcy filing in September by Toy "R" Us, the largest toy retailer in the USA, highlighted struggles that the sector is facing including children's preferences shifting from traditional toys to electronics and online competition increasing.

Mattel has pointed to that bankruptcy as a reason for weak sales. According to The Wall Street Journal, Hasbro is said to be on the prowl (pun) again, after substantiated news just past year, about the two companies being in talks. Mattel's stock fell to its lowest level since 2009 that day.

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.

The other more ensuring detail is Mattel's stock price is way down nearly 50% compared to this time previous year. The company reported a decline in sales after Toys R' Us filed for bankruptcy in September.

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