Hasbro, Mattel said to be in merger talks

Ed Hammond, Alex Sherman and Jeffrey McCracken
Bloomberg

Hasbro Inc. and Mattel Inc. have held talks about merging two of the world’s biggest toymakers, according to people familiar with the matter, in a deal that would bring together the owner of the My Little Pony and Furby brands with Barbie and Hot Wheels.

Hasbro approached Mattel about a potential transaction late last year, and the companies have held on-and-off talks about a deal, the people said, asking not to be identified as the situation isn’t public. Details of how a transaction might be structured couldn’t immediately be learned. The talks may not lead to a deal, the people said.

Representatives for Mattel declined to comment, while representatives for Hasbro didn’t immediately respond to requests for comment.

Mattel shares rose 4 percent to $33.03 at 12:49 p.m. in New York, valuing the company at about $11.2 billion and extending a streak that has seen the stock gain 17 percent this year through Wednesday’s close. Hasbro rose 1.6 percent to $76.19 after climbing as high as $78.45, valuing the company at about $9.5 billion.

Mattel Chief Executive Officer Chris Sinclair is leading a charge to revive the El Segundo, California-based company’s Barbie business, after losing market share in recent years to Europe’s biggest toymaker, Lego, as well as Hasbro’s reinvigorated My Little Pony brand. Shares surged the most in almost seven years Tuesday after holiday results topped analysts’ estimates, even as gross sales fell.

Hasbro is scheduled to report full-year earnings on Feb. 8, with revenue forecast to increase to about $4.4 billion from $4.3 billion in 2014, according to the average estimate of 12 analysts, compiled by Bloomberg. The Pawtucket, Rhode Island-based company holds the toy license for “Star Wars: The Force Awakens,” — a hit in theaters over the holiday season — and said in October that sales were off to a “strong start.”

Revenue at Mattel is set take another hit this year as the licensing rights to Disney’s lucrative Frozen and Princess brands shift to Hasbro. Last week, the company unveiled Barbie dolls with a wider array of options, including shorter and “curvier” versions, in a bid to boost the brand’s appeal.