Hasbro, DreamWorks eye merger

US toy giant Hasbro is in talks to acquire Shrek, Kung Fu Panda and How To Train Your Dragon producer DreamWorks Animation (DWA).

Reports in the US say that talks between the two firms are in their early stages, but that DWA founder and CEO Jeffrey Katzenberg would oversee the merged entity, should a deal be agreed.

Deadline, which first reported the talks, said that any potential agreement is “at least 60 says off.”

Katzenberg has spent the past few years attempting to find a suitor for the company and most recently saw a mooted takeover by Japanese telecoms company SoftBank fall through.

Softbank was said to have offered DWA US$32 a share, valuing the company at US$3.4bn, however the discussions between the two companies broke down soon after reports emerged of the potential acquisition.

A Hasbro-DreamWorks Animation joint venture would bring brands such as Transformers and My Little Pony, which are owned by the toyco, under the same roof as Where’s Waldo?, Noddy and Lassie, which DWA acquired in 2012.

Hasbro already has its own TV and short-form development, production and international distribution unit, LA-based Hasbro Studios, while DWA has produced series based on many of its feature film brands, such as Kung Fu Panda.

Both companies are looking to strengthen their businesses after a challenging year that has seen Hasbro sell part of its 50% stake in The Hub to the other 50% stakeholder, Discovery Communications. It subsequently rebranded the network as Discovery Family Channel.

DWA’s feature films, meanwhile, have performed below expectations at the box office recently, although the firm has diversified its business, acquiring YouTube youth network AwesomenessTV (ATV) for about US$117m last year.

It also has a lucrative content deal with Netflix, which will see the producer create 12 animated series for the SVoD platform, totalling 300 hours of content, before 2017.

DWA also has plans to launch its own kids’ television channel, however Katzenberg told delegates at Mipcom last year that its deal with Netflix made the launch unlikely anytime soon.

In related news, the publishing arm of US media giant Hearst Corp is reportedly considering buying a 25% stake in DWA’s ATV, which would allow it to launch three new digital channels.

These would include a channel for content that appeals to mothers and another that focuses on kids sports, according to Deadline.