Hasbro is one of the largest toy companies in the world (after Lego), and according to a report in The Wall Street Journal, it recently made an offer to take over its chief rival, Mattel. The terms of a potential deal could not be learned, the newspaper said.
If a deal were reached, it would create a huge powerhouse in the toy industry, uniting Monopoly, Nerf and My Little Pony brands from Hasbro with Mattel's Hot Wheels and iconic Barbie.
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 stance by Mattel toward Hasbro related to this approach is not known and it remains far from being certain a deal will eventually materialize, said the source, who asked to remain anonymous since the matter was confidential. It blamed some of the decline on the recent bankruptcy filing of retailer Toys R Us Inc.More news: Meet Danica Roem, Virginia's first transgender elected official
Mattel in late October reported a 14% drop in its third-quarter sales, excluding the effect of currency fluctuations, and suspended its quarterly dividend. But Mattel's shares are down by almost half this year alone - an appealing discount for Hasbro. Hasbro closed at $91.45 a share, up 3%, on Friday. Mattel's stock fell to its lowest since 2009 that day.
A similar rumor that Hasbro and Mattel were holding merger talks appeared in media reports in early 2016, and such speculation repeatedly has surfaced and then faded in the two decades since Hasbro resisted a formal $5.2-billion purchase bid from Mattel.
Mattel has not been the only target of Hasbro, which is trying to diversify its revenue stream.