Feb. 28 - Mattel's acquisition of Lego's rival Mega Bloks will expand the toy maker’s offerings in one of the fastest growing areas, construction play. Fred Katayama reports.
Mattel is buying Lego's rival, Mega Brands of Canada, to expand its lineup in one of the toy industry's hottest areas. The world's largest toy maker will pay $460 million, a hefty premium for the maker of the huge construction bricks popular with preschoolers, Mega Bloks, and the arts and crafts brand, Rose Art. The two know each other just as well as Barbie and Ken from a licensing deal Mattel struck with it two years ago. The move gets Mattel deeper into the fast growing sector of construction play. Danish brickmaster Lego, whose Lego Movie is the current box office smash, boosted its quarterly revenue 10 percent in a slow toy market while Mattel's inched up 1 percent. Many parents seek out traditional toys like Legos and Mega Bloks to limit the time their kids spend on electronic gadgets such as iPads and PlayStations. Mattel, whose stock has fallen 22 percent this year, saw its shares rise slightly at the market open. Mega Brands' shares, which are down 14 percent in that period, rocketed sharply higher.