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The potential antitrust issues of a Hasbro-Mattel merger

When parents in California go shopping for holiday gifts for their young children, they are likely to run into two major brands: Hasbro and Mattel. For decades, these two companies have been known for their extensive toy catalogs as well as their fierce rivalry, which is a major reason why the public merger proposed by Hasbro to Mattel has raised eyebrows.

Mattel made headlines by rejecting the bid presented by Hasbro, describing it as being not just too low but also inconsiderate of potential antitrust issues. Since details about the proposed corporate strategy formulated by Hasbro have not been released, it is not easy to assume whether Mattel is correct to imply that the Department of Justice would scrutinize the merger. While it is true that a single Hasbro-Mattel entity would be the most dominant force in toys around the world, it should be noted that not a single toymaker has complained about this potential merger.

Wrapping up the Barbie and Star Wars toy catalogs under the same company may sound like a monopoly in the making, but this is something that Hasbro has likely considered before making an offer. Analysts believe that Hasbro is just taking advantage of Mattel's difficulties in the wake of the Toys"R"Us bankruptcy, and most initial bids are not welcomed by the target company.

Whether the Hasbro and Mattel merger turns out to be a friendly or hostile acquisition situation remains to be seen. If antitrust complaints are raised, Hasbro will likely retain law firms that specialize in mergers and acquisitions to ensure a smooth business transaction. Two major brands wishing to explore a merger will not always enter antitrust territory.

Source: The Motley Fool, "Does a Hasbro-Mattel Merger Really Raise Antitrust Concerns?", Rich Duprey, 12/01/2017

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