Mattel expands toy brands with acquisition of MEGA for US$460 mn

Toy maker Mattel is advancing its global growth strategy of building upon its portfolio of brands by expanding into two of the fastest growing toy categories. MEGA Brands is the second largest player in the US$4-billion construction building category with its MEGA BLOKS brand as well as a keen competitor in the US$2-billion arts & crafts category.

"A key pillar of our global growth strategy is the strategic acquisition of brands that will both benefit from our scale and help extend our reach into new and growing categories," said Bryan G. Stockton, Mattel Chairman/CEO. Mattel's portfolio of brands will complement MEGA Brands flagship MEGA BLOKS and existing licensed brands, such as HALO, Skylanders, Call of Duty, Assassin's Creed, Power Rangers, Hello Kitty, SpongeBob SquarePants and others. The acquisition will give Mattel the opportunity to broaden its relationship with its entertainment partners.

The acquisition also creates the opportunity to grow the MEGA Brands sizeable arts & crafts business, with brands including Rose Art and Board Dudes. Arts & crafts activities are highly popular among children of all age groups, and the global category provides growth opportunities for Mattel with its core brands and entertainment and licensing partners.

For FY2013, Canada-based MEGA Brands estimates net sales of US$405 million and ranks among the top 15 toy companies globally in terms of sales. It has 1,700 employees in 17 countries. Mattel plans to maintain MEGA Brands manufacturing both in Montreal and Tennessee and plans to maintain the MEGA Brands headquarters in Montreal, Canada.


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