Global toy giant Hasbro is set to acquire UK-based entertainment house Entertainment One (eOne) in an all-cash transaction worth US$4.0 billion.
The acquisition sees popular preschool brands such as Peppa Pig, PJ Masks and new property Ricky Zoom enter the Hasbro stable of brands, further expanding the business into the preschool market.
The deal will also see top eOne executives join the Hasbro business.
In a statement, Hasbro said it expects to see US$130 million in savings from integration benefits, substantial savings from moving a significant portion of eOne’s toy business in-house and enhancing the profitability of eOne’s licensing and merchandising activities.
The implications on current licensing deals between eOne and toy partners is yet to be seen.
Hasbro chairman and CEO Brian Goldner said that the acquisition will allow Hasbro to leverage eOne's capabilities to bring its portfolio to life.
"The acquisition of eOne adds beloved story-led global family brands that deliver strong operating returns to Hasbro’s portfolio and provides a pipeline of new brand creation driven by family-oriented storytelling, which will now include Hasbro’s IP.
"In addition, Hasbro will leverage eOne’s immersive entertainment capabilities to bring our portfolio of brands that have appeal to gamers, fans and families to all screens globally and realise full franchise economics across our blueprint strategy for shareholders.
"We are excited to welcome eOne’s talented employees from around the world into the Hasbro family," he said.
eOne CEO Darren Throop said that eOne's mission aligns perfectly with Hasbro's objectives.
"Hasbro’s portfolio of integrated toy, game and consumer products, will further fuel the tremendous success we’ve achieved at eOne.
"There’s a strong cultural fit between our two companies; eOne’s stated mission is to unlock the power and value of creativity which aligns with Hasbro’s corporate objectives.
"eOne teams will continue to do what they do best, bolstered by the access to Hasbro’s extensive portfolio of richly creative IP and merchandising strength.
"In addition, the resulting expanded Hasbro presence in Canada through eOne’s deep roots will bring world class talent and production capabilities to Hasbro.
"Along with our leadership team, I look forward to working with Hasbro on our joint growth and success for many years to come," he said.
Hasbro expects to finance the transaction with the proceeds of debt financing and approximately US$1.0 billion to US$1.25 billion in cash from equity financing.
Read the full statement here.