Hasbro buys Peppa Pig owner in $4B deal

HASBRO HAS ENTERED into an agreement with Entertainment One to acquire eOne for about $4 billion, the biggest deal in Hasbro's history, according to data compiled by Bloomberg. / COURTESY HASBRO INC.
HASBRO HAS ENTERED into an agreement with Entertainment One to acquire eOne for about $4 billion, the biggest deal in Hasbro's history, according to data compiled by Bloomberg. / COURTESY HASBRO INC.

NEW YORK – Toymaker Hasbro Inc. will buy Entertainment One Ltd. for about $4 billion, its biggest deal ever, according to data compiled by Bloomberg. The acquisition expands Hasbro’s slate of intellectual property to include preschool favorites Peppa Pig and PJ Masks. Hasbro’s shares slipped in late trading.

Under the terms of the all-cash transaction, eOne shareholders will receive 5.60 pounds in cash for each common share, which Hasbro said represents a 31% premium to its 30-day average price.

Key insights

With the acquisition, Pawtucket-based Hasbro said it anticipates “meaningful potential for additional revenue growth and expanded franchise economics with brand-driven animation and live-action TV and film entertainment.”

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The acquisition will provide “a pipeline of new brand creation driven by family-oriented storytelling, which will now include Hasbro’s IP,” Hasbro CEO Brian Goldner said.

The deal will give the toy company London-based Entertainment One’s scripted and unscripted TV production and development capabilities, which includes animated and live-action shows. Hasbro has been a driving force of turning toy properties such as Transformers into bankable TV shows and movies, and this will allow it to grow more in this profitable area.

The acquisition also expands Hasbro’s global reach, by adding a major international brand to its portfolio. About half of Entertainment One’s revenue comes outside the United States.

Entertainment One CEO Darren Throop said the two companies are a natural fit and will especially give Hasbro an expanded presence in Canada, where Entertainment One has deep roots in the television and film industries.

“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,” Throop said.

In addition, the acquisition presents “multiple avenues to bring Hasbro’s franchises to life” in live action and animation via over-the-top online streaming platforms and networks, the companies said.

Hasbro said it expects to realize “in-sourcing and other global annual run rate synergies” of about $130 million by 2022, driven by “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.”

Market reaction

Hasbro shares fell 4% to $109.80 at 4:44 p.m. in late trading in New York. The stock has gained 41% so far this year. Entertainment One shares have risen 20% so far this year.

Matt Townsend and Joe Deaux are reporters for Bloomberg News. PBN contributed to this report.

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