On Friday, Mattel, the company behind Barbie dolls and Hot Wheels, announced it would buy Mega Brands, Inc., the manufacturer of Mega Bloks, in a deal valued at $460 million, the Los Angeles Times reports.
The building sets were the largest category that Mattel was missing from their toy arsenal and puts the company in position to compete with LEGO. Currently LEGO is the world’s number one line of construction sets, while Mega Bloks sits at the number two spot.
Mattel CEO Bryan Stockton says the purchase of Mega Brands is a growth driver for the company has been looking for.
“The acquisition will allow us to enter the construction category quickly and gives us a solid foundation to strengthen our business in the category,” he tells the Times.
Mattel has seen demand for its core products diminish in recent years. Although, Barbie was recently featured on Sports Illustrated’s swimsuit cover and one creative consumer is snatching up Hot Wheels to avoid ATM fees. Meanwhile, Mega has enjoyed more than $300 million in revenue from the construction set sector.
Officials with Mattel say they have no plans to shut down Mega’s Montreal headquarters.
Mattel to compete with Lego with $460 million Mega acquisition [Los Angeles Times]