Hasbro Bids To Purchase Struggling Rival Mattel
Corporate consolidations continue to make headlines as once popular brands fall prey to takeovers and acquisitions. Recently, Hasbro Inc. the company behind toy lines such as Transformers and G.I. Joe has reportedly made an offer to buy beleaguered rival Mattel.
The latest in the long-running speculation that the two major US toy manufacturers would join forces, the Rhode Island-based approached Mattel with a takeover offer. The terms of the proposal were unavailable according to the Wall Street Journal citing people familiar with the matter.
The information should be taken with a grain of salt, however, as the sources themselves claim that the approach could go nowhere. Both companies have refused to issue a comment regarding the recent reports saying that they don't respond to speculation.
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Hasbro currently has brands such as Transformers, G.I. Joe figures, My Little Pony, Nerf, and Play-Doh, as well as games such as Monopoly, Scrabble, and Twister under its wing. It also has rights to valuable entertainment franchises such as Disney's "Star Wars."
On the other hand, El Segundo-based rival's line of toys includes the iconic Barbie doll, Hot Wheels and Matchbox cars, Fisher-Price toys and American Girl dolls. However, the company has been struggling with slumping sales despite hiring former Google executive Margo Georgiadis as CEO. Mattel is currently valued at $5 billion after the stock plunged 47% so far this year. The stock jumped 5% Friday to close at $14.62 a share.
In late October, the company reported a 14% drop in its third-quarter sales, excluding the effect of currency fluctuations, and suspended its quarterly dividend. Part of the decline was blamed on retailer Toys R Us Inc. following its recent bankruptcy filing.
The speculation regarding the merger of the two companies can be traced as far back as the 1990s where Hasbro resisted a formal $5.2-billion purchase bid from Mattel. The company contended a deal might be blocked by federal regulators on antitrust grounds which led Mattel to abandon its offer in early 1996. Two decades on, however, and it appears that the shoe is on the other foot.
