Japanese toymaker Tomy to acquire US rival RC2 for $604 million

Japanese toymaker Tomy Company, today agreed to acquire its US-based rival RC2 Corporation, for $604 million (50 billion yen) as it seeks to expand overseas amid falling domestic sales.

With 2010 sales of $437 million, Illinois-based RC2 is a toy design, marketing and distribution company with popular branded toys such as Thomas & Friends, Bob the Builder, Special Agent Oso, Chuggington and Dinosaur Train among others.

Apart from the US, RC2 sells its toys through multiple channels of distribution throughout North America, Europe, Australia, Asia Pacific and South America. RC2 has an extensive distribution network, including a large number of specialty stores in addition to mass retailers in North America, and markets toys and infant products through 25,000 outlet stores throughout the world.

Tomy is Japan's largest global toy and children's merchandise company with 25 subsidiaries and affiliated companies worldwide. Tomy is already among the top five traditional toy companies in the world and has become a household name in the US after it established its US office in 1973.

Under the deal that has been approved by the boards of both companies, Tomy will buy RC2 for $27.90 per share in cash, a premium of 31 per cent to RC2's average closing stock price over the three months ended 9 March 2011.

The tender offer is scheduled to commence in 10 business days and is expected to close during the second quarter of 2011.