Mattel to buy smaller Canadian rival Mega Brands for $460 mn

Mattel Inc, the world's largest toymaker, today struck a friendly deal to buy smaller Canadian rival Mega Brands Inc for about $460 million, including debt.

California-based Mattel is offering to pay $17.75 per share, a premium of 36 per cent to Mega Brands Thursday closing price of $13.07.

Mega Brands shareholders, including Fairfax Financial Holdings and the company's founders, the Bertrand family, with approximately 39 per cent of the company shares, have agreed to vote in favour of the transaction.

Mega Brands will pay a termination fee of $12 million to Mattel if it accepts an unsolicited proposal.

Mega Brands makes construction toys and arts and crafts under brands such as Mega Bloks, Rose Art, Mega puzzles and Board Dud, and ranks among the top 15 toy companies globally in terms of sales.

The Montreal-based company has approximately 1,700 employees in 17 countries and estimated net sales for FY 2013 of $405 million.

Mattel said that it plans to maintain Mega Brands' manufacturing sites in Montreal and Tennessee, and maintain its headquarters in Montreal.

''Mega Brands has built leading positions in large, growing categories by providing engaging creative experiences for children and families through innovative, well-designed and high-quality products, and Mattel is the ideal partner to take our brands to the next level,'' said Marc Bertrand, Mega Brands president and CEO.