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Hasbro, an American toy giant with popular IPs such as "Transformers" and "Pony Paulie", has a big deal today...
▌ Real hammer! $4 billion
According to Sina U.S. stock news: On the 23rd Beijing time, toy giant Hasbro and "Peppa Pig" parent company Enterprise One Ltd announced today that they have reached a final acquisition agreement. Under the agreement, Hasbro will acquire eOne for £3.3 billion (approximately $4 billion) in cash, and shareholders of the company will receive £5.60 per share of common stock, representing a 31% premium to the Company's 30-day Volume Weighted Average Price (VWAP) for 30 days ended 22 August 2019.
Hasbro emphasized that by adding Access One's family brand, exceptional film and television expertise, and senior executive team, it will accelerate the company's brand blueprint strategy and improve the company's growth prospects and long-term profitability.
In addition, Hasbro said that the transaction will include the preschool brands "Peppa Pig", "Pajama Hero" and the new "Ricky Rush" that are loved by children around the world, strengthen Hasbro's brand for the preschool market, optimize the company's brand portfolio, and will greatly improve the company's media content creation and program production capabilities, and enhance the exposure of the company's IP in multiple channels such as television, movies and other media. In addition to having a popular preschool IP, eOne also has a TV content library and theatrical distribution companies in Canada, the United Kingdom, Belgium, the Netherlands, Luxembourg and Australia. This will be an important step for Hasbro to build its entertainment brand kingdom and make up for its shortcomings in entertainment content production and distribution.
In March, eOne reported 2018 earnings with net income of £198 million ($257 million). Shares on the London Exchange have risen sharply by 23% so far this year.
In 2016, eOne rejected a $1.3 billion acquisition offer from British television group ITV. Three years later, eOne is now worth a lot.
▌ The distress of the toy giant
According to the Chinese and foreign toy network reports, in the 2019 annual toy brand value list Top 25 released by brand value survey agency Brand Finance in the United Kingdom this year, Hasbro (Hasbro) and the group's 10 brands such as Heat, Pony Baoli, Perato, Transformers and so on were on the list at the same time, becoming the toy company with the largest number of finalists in the Top25 list.
But affected by the bankruptcy liquidation of Toys R Us, Hasbro's 2018 was not very good. Full-year 2018 net income was $4.58 billion, down 12 percent from $5.21 billion in 2017 and lower than expected. Revenue from licensed toys fell 22 percent, driven primarily by the Marvel series and Japanese anime Battle Gyro toys, while sales of Star Wars, Princess series, and Frozen-related toys all declined.
As one of Disney's largest toy licensing producers, Hasbro owns toy manufacturing agreements for Disney's "Star Wars", "Marvel Series", "Princess Series", "Frozen", "Lion King" and other IP. But since the IP copyright is in Disney's hands, its biggest competitor Mattel is also likely to take the IP license from Hasbro at any time.
▌ Build the core brand camp
Brand IP will undoubtedly be an important dimension of Hasbro's future development. In addition to maintaining the "cooperative brand" that has been authorized in cooperation with companies such as Disney, the creation of the "core brand" (its own IP) is more important.
In addition to the already super IPs such as "Transformers" and "Pony Paulie", last May, Hasbro also spent $522 million from Saban Properties to acquire IPs and copyrights such as "Power Rangers", "My Pet Monster", "Popples" and "Julius Jr.".
Today, winning eOne will undoubtedly add a heavyweight flag to Hasbro's competition with competitors.
Born in the United Kingdom, where TV creativity is extremely developed, Peppa Pig has developed rapidly under the commercial operation of eOne, becoming the golden signboard of its "family brand" business. According to the homepage of eOne's official website, Peppa Pig currently has more than 1,000 broadcast or licensing agreements, which have been translated into more than 40 languages and distributed in more than 180 countries and regions around the world.
Since entering China in 2015, Peppa Pig has become a household name animation brand. As of the end of October 2018, there were more than 80 authorized operators of "Peppa Pig" in China. In addition, eOne's "Pajamas Little Hero", "Ban Ban and Lily's Little Kingdom", "Ricky Rush" and other IP have also entered the Chinese market.
eOne and Youku Children's incubated global IP "Ricky Rush" was exclusively launched on Youku
In the top 10 of the 2018 Children's Industry List, the Kidscreen Hot 50 List, which was selected by global peers, eOne ranked among the top three with Peppa Pig's outstanding performance.
The performance report of the second quarter of this year released by Hasbro a few days ago shows that the company's main business income and operating profit have increased. Revenue from sales reached $985 million, up 9 percent year-over-year, while operating profit reached $128 million, up 47 percent year-over-year; and while net profit fell to $13.4 million from $60.3 million in the year-ago quarter, earnings per share of 78 cents still far exceeded Wall Street's expectation of 50 cents.
Hasbro and eOne, Transformers and Peppa Pig, what sparks can be sparked in the future? We'll see!
Source: CTOY-GDTA Synthesis
Reference: Sina U.S. stocks, Chinese and foreign toy networks
Pictured: eOne official website, Hasbro flagship store, etc
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