Toy story: Kids' games giant Hasbro makes approach to buy Barbie maker Mattel

 
Francesca Washtell
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A merger of this size wouldn't be child's play but could be beneficial for both companies (Source: Getty)

GI Joe and Barbie could be set to shack up within the same company after toy making giant Hasbro made an offer to buy rival Mattel, according to reports.

Monopoly maker Hasbro recently made an offer for Mattel, the Wall Street Journal reported, citing sources.

The terms of any possible deal "couldn't be learned", the WSJ said, and it is not clear if the approach will move forward.

A tie-up would create a toy powerhouse, uniting Hasbro's brands, which also include My Little Pony, with Mattel's Barbie dolls and Hot Wheels toys.

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Hasbro makes board game monopoly (Source: Getty)

Combining could be beneficial for both businesses as it would give them more pricing power to negotiate with entertainment studios over TV and movie franchises.

Mattel's stance toward Hasbro at this time is not clear, and it remains far from certain that a deal will materialise, the source said, asking not to be identified because the matter is confidential.

Mattel's shares were up 24.74 per cent in after-hours trading to $18.25, while Hasbro's were up more than three per cent to around $94.

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Two weeks ago, Mattel suspended its dividend and chief executive Margo Georgiadis warned the company would miss its full-year revenue forecast.

It has struggled with weak sales, pointing to the bankruptcy in September of Toys 'R' Us, and highlighted issues facing the sector such as online competition and a growing preference for electronics over traditional toys.

This is not the first time a Hasbro-Mattel merger has been on the cards: the companies have had talks several times over the years, including in 1996 and in late 2015, while their shares surged on a merger report early last year.

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