A proposed merger of Hasbro and Mattel an entity that could account for close to half the toys sold in US mass-market outlets, would need to win approval from antitrust officials in Washington who are increasingly saying no to deals marrying the dominant players in an industry, reports Bloomberg.
Competition watchdogs, who are grappling with a logjam of mergers following a frenzy of deal-making last year, have taken an aggressive stance against tie-ups in concentrated industries, opposing transactions such as Comcast Corp.’s bid for Time Warner Cable Inc. and the ultimately successful merger of American Airlines and US Airways.
An antitrust review of a Mattel-Hasbro tieup, which would probably fall to the Federal Trade Commission, will hinge on how broadly officials define the market, according to Jonathan Kanter, a lawyer at Cadwalader, Wickersham & Taft LLP in Washington. If the review focuses narrowly on the companies’ overlaps in specific toy categories, the makers could likely sell off a few product lines to win approval, he said.
If enforcers take a broader view and see the combination as uniting the two biggest toymakers in the U.S., leaving just Denmark’s Lego A/S as their next biggest competitor, the deal could be in for a rough ride, he said.
“Are they going to look at it through the traditional approach of the last 20 years, which has been focused mostly on defining narrow markets and evaluating the merger segment by segment?” said Kanter. “Or are they going to continue the trend of looking at deals more holistically and examine them based on the broader impact? That’ll ultimately determine the fate of the deal.”
Full content: Bloomberg
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