Mattel, Inc. (NASDAQ:MAT) has made a friendly takeover offer for Canadian toy maker Mega Brands Inc. (TSX:MB), which has the world's No. 2 line of construction sets after Lego.
The deal values the Montreal-based company at US$460 million, including debt that the American industry giant will assume or repay.
Mattel _ maker of Barbie dolls, Hot Wheels cars and numerous other toys _ says Mega Brands will help it expand in two of the fastest-growing product segments _ construction sets and arts and crafts.
In addition to its original Mega Bloks franchise, Mega Brands offers arts and craft products under the Rose Art and other brands,which will be added to Mattel's own offerings in that product 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,'' Bryan Stockton, Mattel's chairman and CEO, said in the joint announcement Friday morning.
``The construction play pattern is popular, universal and has had one of the fastest growth rates over the past three years. We look forward to helping Mega Brands accelerate its global growth, providing more choices for more children and their families.''
Marc Bertrand, the president and CEO of Mega Brands as well as a significant shareholder, said Mattel is the ``ideal partner'' to help his company grow to the next level.
``We are confident Mattel's scale and global platform spanning 150 markets _ combined with the expertise of our people in the construction and arts and crafts categories _ will create tremendous growth opportunities for our brands.''
The companies scheduled separate conference calls Friday morning to discuss the deals with analysts.
Mattel is offering C$17.75 cash per share of Mega Brands and has the support of shareholders with 39 per cent of Mega Brands stock.
The cash portion of the offer is about 35 per cent above the recent market price for Mega Brand shares, which closed Thursday at $13.07 on the Toronto Stock Exchange.