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Barbie finds a new home
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November 18, 1996: 7:45 p.m. ET
Mattel purchases Tyco Toys in a $755 million stock deal
From Correspondent Rhonda Schaffler
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NEW YORK (CNNfn) -- Mattel, the maker of the Barbie Doll, said Monday it is buying Matchbox car manufacturer Tyco Toys in a stock deal worth $755 million.
The deal isn't just a story about two companies joining forces in a consolidating industry; it's more like a case of trying to mend a broken heart.
After spending months courting G.I. Joe before being rejected, Barbie had to settle for buying a new set of wheels.
Earlier this year, Barbie-maker Mattel tried to acquire Hasbro, makers of G.I. Joe. The marriage of Barbie and G.I. Joe would have combined the nation's two biggest toy makers, but Hasbro had no interest in playing along.
"In reality, that was going to be very messy from an antitrust standpoint and meet a lot of resistance from the top management at Hasbro. That was a whole different story," said Harold Vogel, entertainment analyst at Cowen & Co.
This Tyco acquisition is in full keeping of the Mattel's pattern of taking over smaller companies, Vogel noted.
Tyco, now in the midst of a turnaround, will be Mattel's 11th acquisition in a decade. Tyco's biggest strength coincides with Mattel's weakness: sales to boys. Tyco's Matchbox and remote control car lines should change that. Tyco's Sesame Street line also meshes well with Mattel's Fisher Price toys.
The combination of Tyco and Mattel will create a company with a 25-percent market share of the Toy Industry. In contrast, Hasbro has 15 percent.
Jill Krustick, entertainment analyst at Smith Barney, said that statistic is important in an industry where volume is king. (80K WAV) or (80K AIFF)
Barbie may have outfoxed G.I. Joe this time around, but he's apparently read to make the next move.
Hasbro is reportedly hunting for an acquisition itself, to even the field in the battle for market share.
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