Hasbro Inc. has made a takeover offer for rival Mattel Inc., according to people familiar with the matter, a combination that would unite the two biggest US toy makers and put Barbie dolls and Nerf guns under the same roof. Hasbro owns Nerf, Transformers, and My Little Pony, while Mattel makes Barbie and American Girl dolls, along with Fisher-Price and Hot Wheels toys.
The news first broke courtesy of the New York Times, with the outlet revealing that the approach from Hasbro was made in recent months.
A new combined entity would have pricing power that it could use to negotiate with entertainment studios and over movie and television franchises.
Both Mattel and Hasbro declined to make a comment.More news: Facebook Exploits Vulnerability In Human Psychology, Says Founding President Sean Parker
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Mattel's shares jumped 20 per cent in after hours trading, while Hasbro rose 2.2 per cent.
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. 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 a year ago. The terms of a potential deal couldn't be learned, and as always, there may not be one. Conversely, Hasbro shares have increased 8 percent bringing its market value to an impressive $11.4 billion.
The other more ensuring detail is Mattel's stock price is way down nearly 50% compared to this time previous year.
That deal would have given Hasbro a direct pipeline into Hollywood, with more movies and TV shows tied to its toy brands.