Hasbro Inc. has made a takeover offer for rival Mattel Inc., according to people familiar with the matter, a potential combination that would unite the two biggest USA toy makers and put Barbie and G.I. Joe under the same roof. Despite its financial woes, brands like Fisher Price and Hot Wheels, which are still seen as valuable, are said to make Mattel "ripe for a takeover" by Hasbro.
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. The terms of a potential deal could not be learned, the newspaper said.
Mattel's shares jumped 20 per cent in after hours trading, while Hasbro rose 2.2 per cent.
Hasbro and Mattel declined to comment. By Friday afternoon, its shares had risen by around 24 percent.
Talks that the two may join forces has been long rumored, as Mattel's stock has fallen a significant 52 percent over the past year, leaving its market value at $5 billion.
Mattel has pointed to that bankruptcy as a reason for weak sales. Mattel stock fell on that day to its lowest since 2009.
But, the deal could be an opportunity for Mattel, which has struggled financially in recent years.
Hasbro, which is trying to diversify its revenue stream, also sought to buy USA movie studio and entertainment company Lions Gate Entertainment Corp (LGFa.N) this year, but those talks ended without a deal, Reuters reported in August.
In 2014, Hasbro held merger discussions with DreamWorks Animation SKG Inc, the studio behind "Shrek", but DreamWorks was subsequently bought by Comcast Corp (CMCSA.O).