Mattel, Fisher-Price To Merge, Creating New No. 1 Toymaker

EL SEGUNDO, Calif. - Putting Barbie and a whole family of Little People under one roof, Mattel Inc. and Fisher-Price yesterday announced a $1 billion merger that will make the combined company the nation's No. 1 toy maker.

The alliance will edge out Hasbro Inc., maker of G.I. Joe and an army of other products, for the top spot in the $10 billion worldwide toy market.

The deal, which will fold Fisher-Price into Mattel, represents a coup for El Segundo-based Mattel, which only a decade ago was a money-loser struggling to keep its dwindling share of the toy market. The Fisher-Price lineup gives bulk to Mattel's muscle: The two companies last year had combined sales of more than $2.5 billion, for a combined 15.3 percent worldwide market share. Hasbro last year had sales of about $2.4 billion and a 14.6 percent share of the toy market.

The agreement to merge was signed late in the afternoon in New York. Mattel Chairman John Amerman said he expects the stock-transfer merger to be complete by Dec. 1. Each common share of Fisher-Price stock will be exchanged for 1.275 shares of Mattel stock.

Amerman said that the company would file within 10 days for approval under antitrust laws but that he expects no opposition from the Justice Department.

Fisher-Price Chairman Ronald Jackson, 49, said he was committed to ensuring the success of the merger but did not say whether he expected to stay after the merger was completed.

The companies said Fisher-Price would keep its East Aurora, N.Y., headquarters. Amerman said that some staff reductions would be made but had not been determined yet.

Analysts said the merger made perfect sense for Mattel.

Mattel specializes in the fantasy line of toys - with its Barbie and Hot Wheels products and toys based on Disney characters.

Fisher-Price products, primarily aimed at the preschool and infant markets, have long been known for their high quality and educational values. They include the Little People and Puffalumps brands, riding toys and play-yard equipment.

Mattel has a vast worldwide sales network that Amerman said would now market Fisher-Price's products.