Hasbro and Mattel are working on a merger

Hasbro and Mattel, two major American toy manufacturers, are apparently considering a merger, according to an anonymous source who told press agency Bloomberg. The goal is to obtain a better position to compete with Danish Lego.

Quarter of the market

Mattel is mostly known for Barbie and Hot Wheels, but has been struggling to keep Hasbro in check these past few years. With Star Wars and My Little Pony, Hasbro has several very successful brands, while Mattel recently several licenses to Hasbro.

However, it seems Hasbro was the one to initiate talks with Mattel about a possible merger between both toy manufacturers. Together, they would have about a quarter of the market, low enough to avoid issues with the Federal Trade Commission’s Bureau of Competition. A merger would also create a stronger company, which should be able to compete with Danish Lego, a company that managed far better growth over the past few years than either American company.

Both companies have held merger talks before, but Mattel withdrew its 5.2 billion dollar offer some 20 years ago, after it felt Hasbro had used the media to create an unsustainable environment surrounding the merger. That made sense at the time, as Hasbro did everything it could to avoid a merger back then. Clearly, that opposition has now faded.