Money

Barbie gets building: Mattel to buy Mega Brands

Feb. 28, 2014 at 1:06 PM ET

Mattel Inc., the world's No. 1 toymaker, said it agreed to buy Canada's Mega Brands Inc. for about $460 million, including debt, to expand its construction and arts and crafts offerings.
Mattel, known for its Barbie and Hot Wheels brands, offered $17.75 Canadian per Mega Brands share, representing a premium of 36 percent to the stock's close Thursday.
Mega Bloks and Lego toys are pictured in store in Toronto
PETER JONES / Reuters
Mattel Inc., the world's No. 1 toymaker, said it agreed to buy Canada's Mega Brands Inc. for about $460 million, including debt, to expand its construction and arts and crafts offerings. Mega Brands has the No. 2 line of construction sets after Denmark's Lego.
"The construction play pattern is popular, universal and has had one of the fastest growth rates over the past three years," Mattel's Chief Executive Bryan Stockton said in a statement.
Montreal-based Mega Brands makes construction toys and arts and crafts under brands such as MEGA Bloks, Rose Art and MEGA puzzles. The company said it has estimated net sales of $405 million in 2013.
Construction toys and other traditional toys have become popular among parents seeking to limit the amount of time their children spend using iPads and other electronics with screens.
Both Mattel and its U.S.-based rival Hasbro Inc. posted lower-than-expected results in the fourth quarter.
In contrast, Denmark's Lego, mostly known for its colorful bricks, increased sales by 10 percent in a sluggish global toy market in 2013.

-Reuters

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