Barbie eyes up Action Man in Toytown battle

Takeover bid: Best-selling brands are the prize as US giants fight for control of pounds 45bn market

NIGEL COPE

Toytown was pitched into a billion-dollar takeover conflict yesterday when Barbie, the undisputed queen of the doll market, was sent into battle with Action Man.

The lines were drawn when Barbie's parent company, Mattel-Fisher Price, launched a hostile $5.2bn (pounds 3.45bn) offer for the rival toy group, Hasbro, whose portfolio includes Action Man as well as Barbie's arch rival Sindy, GI Joe and the re-launched Cabbage Patch dolls.

Hasbro has rejected the offer, but if successful it would create the world's largest toy company, with sales of more than $7bn and a sizeable share of the world's pounds 45bn toy market.

It could get nasty. Barbie, the pneumatic blonde whose latest incarnation was a Baywatch beauty, has been top of the toy tree since her debut in 1959. But Sindy, which sells well in the UK but is not available in the US, is certain to put up a fight.

Jon Salisbury, editor of the trade magazine World Toy News, said: "It's all about brands. Mattel is strong in pre-school toys with its Fisher Price range and with the Barbie doll, but it has not had a big boy's toy since Masters of the Universe in 1985. That is Hasbro's strength with Action Man, GI Joe and Tonka toys. This bid was inevitable at some time."

Mattel says it wants to merge with Hasbro because the two have complementary products which when put together would create a stronger group capable of more consistent growth and greater economies of scale. It says it would be able to generate pounds 100m of cost savings in the first year alone.

Toy companies have long struggled to maintain consistent growth in a market dominated by crazes that are often linked to hit films and television shows such as Jurassic Park, Thunderbirds and Batman. A hit generates millions. Expensive flops can cripple smaller companies. The toy industry has seen a spate of takeovers in the last few years. Hasbro bought Waddingtons, makers of Monopoly. Mattel has acquired Fisher Price and JW Spear, makers of Scrabble since 1993.

Analysts in New York said Hasbro's assets had been under-managed. "We believe that some of Hasbro's evergreen brands could flourish much more under Mattel's skilled nurturing and marketing savvy," one said.

But the deal could run into problems, such as difficulties on monopoly grounds as the two are already the largest companies in the sector. Mattel and Hasbro combined would have a 30 per cent share of the $13bn-a-year US toy market and 25 per cent of the UK's pounds 1.6bn market. Mattel hopes to avoid such problems, possibly by selling parts of Hasbro.

Another potential stumbling block is the contrasting culture of the two companies. Mattel was founded in 1945, is based in Los Angeles and regarded as an aggressive company which focuses strongly on profits. Hasbro was founded in the 1920s, is based in Rhode Island, and the founding Hassenfeld company still controls a large stake. It is known as a paternal employer that donates large sums to charity.

Hasbro performed strongly in the 1980s but has under-performed recently. It had a hit with Jurassic Park in 1993 but failed to follow it up last year. In recent meetings the company's chairman, Alan Hassenfeld, has admitted that the company needed to be more aggressive.

Meanwhile Mattel's fortunes have blossomed, fuelled by Barbie sales, which now account for $1bn of the group's pounds 3.65bn yearly sale, and the takeover of Fisher Price in 1993.

Analysts say that a white knight could yet rescue Hasbro. Disney has been mentioned as one possibility. Others say that even if the bid fails, Mattel may have weakened Hasbro sufficiently to force a break-up.

But one thing is certain. With the UK toy fair due to start in London tomorrow and the world equivalent scheduled for the US next month, this bid will be the talk of Toytown.

How the toy giants measure up

Hasbro

Key brands: Sindy, Action Man, Tonka, Waddington (Monopoly), GI Joe, My Little Pony, Playskool.

Sales (1995): $2.86bn (pounds 1.9bn).

Profits: $175m (pounds 115m).

Founded: 1923.

Head office: Rhode Island.

Culture: Still partly owned by founding Hasselfeld family. Paternal and caring. Helps charities.

Mattel

Key brands: Barbie, Scrabble, Cabbage Patch dolls, Hot Wheels.

Sales (1995): $3.65bn (pounds 2.4bn).

Profits: $370m (pounds 244m).

Founded: 1945.

Head office: Los Angeles.

Culture: West Coast style, with an aggressive go-getting management. It is focused on profits above all else.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Digital Web Designer

Negotiable: Recruitment Genius: A Digital Web Designer is required to join a f...

Recruitment Genius: Sales Executive / Business Development Manager

Negotiable: Recruitment Genius: This is a fantastic opportunity to develop an ...

Recruitment Genius: Web Developer - Junior / Middleweight

Negotiable: Recruitment Genius: One of the South East's fastest growing full s...

Guru Careers: Marketing Manager / Marketing Communications Manager

£35-40k (DOE) + Benefits: Guru Careers: We are seeking a Marketing Communicati...

Day In a Page

Fifa corruption: The 161-page dossier that exposes the organisation's dark heart

The 161-page dossier that exposes Fifa's dark heart

How did a group of corrupt officials turn football’s governing body into what was, in essence, a criminal enterprise? Chris Green and David Connett reveal all
Mediterranean migrant crisis: 'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves,' says Tripoli PM

Exclusive interview with Tripoli PM Khalifa al-Ghweil

'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves'
Raymond Chandler's Los Angeles: How the author foretold the Californian water crisis

Raymond Chandler's Los Angeles

How the author foretold the Californian water crisis
Chinese artist who posted funny image of President Xi Jinping facing five years in prison as authorities crackdown on dissent in the arts

Art attack

Chinese artist who posted funny image of President Xi Jinping facing five years in prison
Marc Jacobs is putting Cher in the limelight as the face of his latest campaign

Cher is the new face of Marc Jacobs

Alexander Fury explains why designers are turning to august stars to front their lines
Parents of six-year-old who beat leukaemia plan to climb Ben Nevis for cancer charity

'I'm climbing Ben Nevis for my daughter'

Karen Attwood's young daughter Yasmin beat cancer. Now her family is about to take on a new challenge - scaling Ben Nevis to help other children
10 best wedding gift ideas

It's that time of year again... 10 best wedding gift ideas

Forget that fancy toaster, we've gone off-list to find memorable gifts that will last a lifetime
Paul Scholes column: With the Premier League over for another year, here are my end of season awards

Paul Scholes column

With the Premier League over for another year, here are my end of season awards
Heysel disaster 30th anniversary: Liverpool have seen too much tragedy to forget fateful day in Belgium

Liverpool have seen too much tragedy to forget Heysel

Thirty years ago, 39 fans waiting to watch a European Cup final died as a result of a fatal cocktail of circumstances. Ian Herbert looks at how a club dealt with this tragedy
Amir Khan vs Chris Algieri: Khan’s audition for Floyd Mayweather may turn into a no-win situation, says Frank Warren

Khan’s audition for Mayweather may turn into a no-win situation

The Bolton fighter could be damned if he dazzles and damned if he doesn’t against Algieri, the man last seen being decked six times by Pacquiao, says Frank Warren
Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Fifa corruption arrests: All hail the Feds for riding to football's rescue

Fifa corruption arrests

All hail the Feds for riding to football's rescue, says Ian Herbert
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

How Stephen Mangan got his range

Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor