Here's why Hasbro's $4 billion eOne acquisition may trigger more media mergers
$4 billion to acquire indie studio Entertainment One is largely the toymaker’s way of piggybacking on a cartoon farm animal that is popular in China, and observers are saying that the deal also has ramifications for an entertainment industry in the throes of merger fury and desperate for inroads into a giant overseas marketplace., a preschool show from the U.K. that has been endorsed by the People’s Liberation Army in China, a country sporting a population of 1.
"The addition of the Peppa Pig and PJ Masks brands offers Hasbro a pipeline into China, as well as other parts of the world,” says Jackie Breyer, editorial director of the Hasbro already has an enviable stable of proprietary brands, including the recently acquired Power Rangers franchise, but it has been focused on toy-based entertainment and entertainment-based toys, while eOne has expertise in film and TV production and distribution, notes Breyer.
Meanwhile, many are predicting that Hasbro’s move is another salvo in an M&A shootout that puts more smaller and mid-sized entertainment companies — such as Lionsgate, AMC Networks and MGM — in play. If Lionsgate were valued at the same multiple that Hasbro put on eOne, “its equity would be $36.36 per share rather than $10.41, or 249.13 percent higher than where it currently is,” said Routh.
Hasbro could be among the buyers of additional entertainment firms over time, Routh says, noting that Goldner sits on the board of CBS and will be on the board of the merged ViacomCBS, which has already made overtures to acquire Lionsgate. And another Wall Street observer wondered on Friday if toy giant Mattel may shoot back at Hasbro with an acquisition of a company similar to eOne.
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