US toymakers Mattel Inc and Hasbro Inc have held talks about a possible merger, Bloomberg yesterday reported, citing people familiar with the matter.
Hasbro approached Mattel about a potential transaction late last year, and the companies have held on-and-off talks about a deal. The talks may not lead to a deal, the report said.
If completed, the deal will bring together the maker of Transformers and Furby, with the Hot Wheels and Barbie manufacturer and be able to better compete with Denmark's Lego, which has been growing faster than either of its US rivals, the report added.
The combined company will have a market capitalization of around $20 billion.
But a merger of the two of the biggest US toymaker would come under intense scrutiny of the regulators since a merged company will would control around 20 per cent of the US retail toy market.
Regulators would see if both companies portfolio of toys are complementary, since Hasbro focuses on boys' toys and board games like Monopoly, while Mattel focuses more on girls.
Founded in 1923, Rode Island-based Hasbro has brands that include Littlest Pet Shop, Magic: The Gathering, Monopoly, My Little Pony, Nerf, Play-Doh and Transformers.
The company has a market cap of $9.3 billion and posted revenues of $4.28 billion in 2014.
Mattel, based in California is the world's largest toymaker with a portfolio consisting of best-selling brands that include Barbie, the most popular fashion doll ever produced, Hot Wheels, Monster High, American Girl, Thomas & Friends and Fisher-Price brands, including Little People and Power Wheels, as well as a range of entertainment-inspired toy lines.
The company employs nearly 30,000 people in 40 countries and sells its products in more than 150 nations.
It has a market cap of $10.78 billion and 2015 revenues of $5.7 billion.