Mattel, Hasbro looking into merging operations, reports say

LOS ANGELES – Mattel Inc. and Hasbro Inc. may be looking for a bigger toy box.

The two toy manufacturers have held talks about merging their businesses, according to Bloomberg News, which cited people familiar with the matter. Hasbro approached Mattel late last year, and talks have continued sporadically.

Both companies declined to comment.

Shares of Mattel and Hasbro jumped Thursday on the report but have since given back most of the gains. Mattel, based in the Los Angeles area, closed at $31.81 a share Friday, while Hasbro, based in Rhode Island, closed at $74.10.

Mattel tried to buy Hasbro 20 years ago for $5.2 billion, but it gave up after Hasbro balked.

A merger would create a formidable toy company, combining Mattel’s dominance in girl toys with Hasbro’s traditional focus on the boy-toy aisles (although Hasbro has been steadily expanding its girls business with brands like My Little Pony).

Mattel has been fighting to turn around its business in recent years as other toymakers such as Lego and MGA Entertainment grabbed market share. After suffering eight straight quarters of revenue declines, Mattel this week posted higher revenue and net income in its fourth quarter, thanks to rising sales in core brands including Barbie and Hot Wheels.

Mattel also was dealt a blow when it lost the doll licenses to Disney’s hit “Frozen” and princess properties.

Merchandise sales from Disney’s princesses, especially connected to the blockbuster animated film “Frozen,” brought in more than $300 million a year for Mattel, analysts said. Hasbro won those licenses starting this year.