With that out of the way, you may be interested in reading an analysis over on SeekingAlpha concerning rumours of Hasbro acquiring Takara Tomy as part of itself (rather than the current partnerships they operate on certain franchises, such as Transformers), after Takara Tomy lost the license to one of its more lucrative products: Pokémon. The full piece is behind a register-to-read wall, but you can read the summary and the opening paragraphs below.
What do you make of this potential, but not at all confirmed or suggested anywhere else, circumstance? Would you be happy with the change? Let us know in the Energon Pub!
Summary
- Takara Tomy is losing one of its best licenses, and its revenue outlook is negative for the next two years.
- The company has failed in its effort over the past six years to diversify from a declining Japanese toy market.
- The company has incurred massive losses since 2012.
- It has hence become a takeover target and this possibly from the side of Hasbro.
A few weeks ago, I had a conversation with an old friend of mine, a senior buyer at a large Japanese toy retailer, who asked me whether I had seen the announcement about Pokemon pulling its license from Takara Tomy (OTC:TKHIY) and giving it to Wicked Cool Toys Company as of July 2018. I said that I had, and the follow-up question was whether I thought it likely that one of the two large American toy companies would buy Takara Tomy. Japanese executives are not in the habit of asking flippant questions, and this one made me think that there could in fact something major be happening and meriting further investigation.
First, some background.
In a Toy News Magazine article dated April 6, 2011, I said that:
“Takara Tomy is buying RC2 and challenging the leading US and European toy manufacturers on their own turf. With this move the company is transforming itself from a local giant into one with a decent presence in all major markets and a viable competitor to Mattel, Spin Master and JAKKS. I have omitted Hasbro from that statement because there are ties between the two companies effectively ruling out competition between them.”
There was a solid reason why Takara Tomy was anxious to diversify away from its home market. Japan toy sales have been declining for since 2010 due to negative population growth, a trend that is unlikely to reverse itself in a hurry: