News of Hasbro Inc.'s strong financial results in 2015 is being overshadowed by speculation the toymaker has been discussing a merger with the top dog, Mattel Inc.
Hasbro's full year earnings statement was released four days after Bloomberg reported that sources close to the matter revealed the companies have held merger talks. A merger would create a toy behemoth with about $10 billion in annual sales, more than double that of its closest rival, Lego A/S, which logged approximate sales of about Danish Krone 28.3 billion ($4.2 billion) last year, based on its first-half performance.
A merger of the two companies could eventually lead to a giant that would rival Walt Disney Co. in the toy/play sector. Disney is reportedly the largest licensor in the world, recording sales of about $4.5 billion for licenses for its stable of brands like Nerf and My Little Pony.
But a merger also could be the beginning of a whole new type of toy company as Hasbro weans itself from the labors of toy manufacturing. Hasbro sold two giant toy and game factories to Belgium's Cartamundi Group last summer and it is looking to capitalize on its brands in other ways.
In a Feb. 8 financial conference call with analysts, Hasbro officials touted a “brand building blueprint” strategy that promotes the goodwill of brands rather than actual toys. Hasbro has stated its mission is to create the world's best play experiences. Storytelling and branding can engage children without the historical reliance on making and selling physical toys.
“Telling stories is less seasonal,” Hasbro CFO Deborah Thomas told analysts in the recent conference call.
“We are open to ideas that enhance our brand blueprint strategy,” added Hasbro President and CEO Brian Goldner.