Post by Dxtra30 on Oct 20, 2005 13:44:48 GMT -5
From the New York Post:
"By SUZANNE KAPNER
Barbie may soon have a new playmate: G.I. Joe.
Analysts are predicting that Mattel, maker of Barbie, may make an acquisition and they say Hasbro, owner of G.I. Joe, is a likely target.
Large toy companies have been struggling with slack sales, paving the way for a new round of consolidation, industry observers said.
A combination of Mattel, the largest toy company, and Hasbro, the No. 2 player, would benefit from substantial cost savings and provide an important counterweight to powerful retailers such as Wal-Mart and Target, they said.
"These companies are under pressure to generate sustained revenue and earnings growth, and that could lead to more consolidation in the toy industry," said Timothy Conder, an analyst with A.G. Edwards, who wrote in a note this week that an acquisition of Hasbro by Mattel is the "most logical."
Lisa Marie Bongiovanni, a Mattel spokeswoman, said it was company policy not to comment on mergers or acquisitions.
She noted that when Mattel Chief Executive Robert Eckert fielded questions from analysts on a conference call earlier this week, he said an acquisition would only happen if it was "the right company at the right time at the right price."
A Hasbro spokesman wasn't immediately available.
While analysts and investors generally agree that Mattel should do a deal, they are divided over which company it should buy.
"Everyone wishes Mattel would buy Hasbro, but that probably won't happen," said Sean McGowan of Harris Nesbitt.
The two companies discussed a merger in 1996, but the deal fell through when Hasbro voiced concerns over antitrust issues.
But both Mattel and Hasbro have seen their market shares decline in recent years, making antitrust issues less of a threat.
Combined, the two companies have about 29 percent of the $21 billion toy market. When video games are included, their share falls further, according to the NPD Group.
Mattel has a history of acquisitions, buying Fisher-Price in 1993, Tyco Toys in 1996, and Pleasant Co., maker of the American Girl dolls, in 1998.
But Mattel began to take a more tempered approach after it was burned by its $3 billion purchase of the Learning Co., also in '98.
Other potential targets for Mattel could be Leap Frog Enterprises, the maker of educational toys, or Lego Holdings, Conder, the analyst, said.
"But," he added, "If you want to have a big impact, you buy Hasbro." '
"By SUZANNE KAPNER
Barbie may soon have a new playmate: G.I. Joe.
Analysts are predicting that Mattel, maker of Barbie, may make an acquisition and they say Hasbro, owner of G.I. Joe, is a likely target.
Large toy companies have been struggling with slack sales, paving the way for a new round of consolidation, industry observers said.
A combination of Mattel, the largest toy company, and Hasbro, the No. 2 player, would benefit from substantial cost savings and provide an important counterweight to powerful retailers such as Wal-Mart and Target, they said.
"These companies are under pressure to generate sustained revenue and earnings growth, and that could lead to more consolidation in the toy industry," said Timothy Conder, an analyst with A.G. Edwards, who wrote in a note this week that an acquisition of Hasbro by Mattel is the "most logical."
Lisa Marie Bongiovanni, a Mattel spokeswoman, said it was company policy not to comment on mergers or acquisitions.
She noted that when Mattel Chief Executive Robert Eckert fielded questions from analysts on a conference call earlier this week, he said an acquisition would only happen if it was "the right company at the right time at the right price."
A Hasbro spokesman wasn't immediately available.
While analysts and investors generally agree that Mattel should do a deal, they are divided over which company it should buy.
"Everyone wishes Mattel would buy Hasbro, but that probably won't happen," said Sean McGowan of Harris Nesbitt.
The two companies discussed a merger in 1996, but the deal fell through when Hasbro voiced concerns over antitrust issues.
But both Mattel and Hasbro have seen their market shares decline in recent years, making antitrust issues less of a threat.
Combined, the two companies have about 29 percent of the $21 billion toy market. When video games are included, their share falls further, according to the NPD Group.
Mattel has a history of acquisitions, buying Fisher-Price in 1993, Tyco Toys in 1996, and Pleasant Co., maker of the American Girl dolls, in 1998.
But Mattel began to take a more tempered approach after it was burned by its $3 billion purchase of the Learning Co., also in '98.
Other potential targets for Mattel could be Leap Frog Enterprises, the maker of educational toys, or Lego Holdings, Conder, the analyst, said.
"But," he added, "If you want to have a big impact, you buy Hasbro." '