Mattel shares jump on merger report

Barbie Image copyright Getty Images

Shares in Mattel, the maker of Barbie dolls, jumped 8% on Thursday following a report it had discussed a merger with rival Hasbro.

Hasbro, the maker of My Little Pony, approached Mattel about a deal late last year, according to Bloomberg news.

The combination of the two toy-makers would produce a company with a $20bn market capitalization as of Wednesday.

In 1996, Mattel made a $5.2bn (£3.5bn) offer to buy Hasbro, but the two sides failed to reach a final agreement.

Over the last few years, Mattel has lost market share to Hasbro and Denmark's Lego. Lego overtook Mattel as the world's largest toy-marker in 2014.

In its most recent quarter, Mattel reported a 4% drop in worldwide sales and expects sales to decline this year.

That is partly because Hasbro has taken over the contract to produce toys based on the Disney movie Frozen, and toys sold under the Princess brand.

Mattel estimated in 2014 that the Princess brand brought in $300m.

In an effort to boost sales of its Barbie line, Mattel introduced three new body types and seven new skin tones in January. Sales of Barbie dolls fell 10% globally in 2015.

Neither company has commented on the rumoured deal.

Hasbro's share price rose 1.5%. In afternoon trading, Mattel shares fell back and were trading up 1.6% on the day.

Hasbro reports its full-year earnings report on 8 February.

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