There may be a major toy merger brewing, because Hasbro tabled a bid for its competitor Mattel. The new company could become the world’s largest toy company.
Merchandising
Hasbro’s Mattel bid came to light thanks to The Wall Street Journal’s anonymous sources, but the details remain scarce. Mattel’s market value is around 5 billion dollars (4.3 billion euro), but the company has already lost 47 % in value this year alone, despite properties like Barbie and Hot Wheels. Hasbro’s value is twice as high, at 11 billion dollars (9.4 billion euro). It is mostly known from its board games.
If everything goes through, the company will obtain an enormously advantageous bargaining position towards television and movie makers when it comes to merchandising, which is a very important source of income for toy makers. Mattel used to have a contract with Disney for a long time, but lost that deal to Hasbro.
LEGO
This consolidation effort should also strengthen them in a very difficult market. Traditional games and toys have done badly for quite some time and that is particularly clear in their home territory, the United States. Toy chain Toys ‘R’ Us recently shut down, which had a huge impact on Mattel’s turnover.
It is not the first time both companies have discussed a collaboration: both in 1996 and 2016, they briefly discussed a merger. LEGO obtained the title of “largest toy maker in the world” from Mattel earlier this year, thanks to its 5.1 billion euro turnover. However, if the Hasbro – Mattel merger becomes a reality, it will quickly have to relinquish its title.
