Hasbro sells eOne’s TV and movie business for $500 million after paying $4 billion for it.

Hasbro sells eOne's TV and movie business for $500 million after paying $4 billion for it.

Hasbro Acquires Lionsgate in a $375 Million Deal

Hasbro, the well-known toy company, announced its plans to acquire Lionsgate in a deal worth $375 million. In addition to the cash, Hasbro will also be assuming production financing loans as part of the agreement. This acquisition will grant Lionsgate access to the vast library of almost 6,500 titles owned by Entertainment One (eOne), a company previously purchased by Hasbro in 2019 for $4 billion.

Among the valuable titles included in the eOne library are popular TV series such as “Grey’s Anatomy,” “Yellowjackets,” and “The Woman King.” Furthermore, as part of the acquisition, Lionsgate will also gain film development rights to Hasbro’s iconic board game, Monopoly.

This deal is seen as an opportunity for Lionsgate to expand its operations in the U.K. and Canada, where the company has recently established production partnerships with esteemed entities such as BBC Studios, Channel Four, CBC, Rogers’ CityTV, and Bell Media. By joining forces with eOne, Lionsgate will be able to further scale its operations in these regions and strengthen its presence.

Hasbro’s initial interest in eOne stemmed from its desire to expand its portfolio of preschool brands. This included popular properties like Peppa Pig and PJ Masks. With the acquisition of eOne, Hasbro gained ownership over the family brands division, allowing the company to retain the rights to these beloved characters.

However, in a strategic move to focus more on its branded entertainment strategy, Hasbro announced in November that it was considering selling a portion of eOne’s television and film business. This decision was made to streamline and align the company’s resources with its core objectives.

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The boards of both Hasbro and Lionsgate have given their approval for the transaction, which is expected to close by the end of the year. Hasbro has stated that it plans to use the proceeds from the deal to retire at least $400 million of floating rate debt by the end of the year, another positive outcome for the company.

In addition to this exciting announcement, Hasbro also reported its financial results for the second quarter. The company experienced a loss of $235 million, or $1.69 per share, during this period, a turnaround from the profit it had generated in the same quarter the previous year.

However, when adjusted for asset impairment costs and amortization costs, Hasbro’s earnings amounted to 49 cents per share, falling slightly below the expected 58 cents per share according to analysts surveyed by Zacks Investment Research.

Despite this setback, Hasbro’s revenue for the quarter stood at $1.21 billion, surpassing Wall Street’s estimate of $1.11 billion. Although the figure marked a 10% decrease from the previous year, it still demonstrated the company’s resilience and ability to adapt to changing market conditions.

Following the announcement of the acquisition, shares of Hasbro experienced a slight increase in midday trading, reflecting the positive sentiment surrounding the deal.

In conclusion, the acquisition of Lionsgate by Hasbro marks an important milestone for both companies. It allows Lionsgate to leverage the extensive eOne library and gain film development rights to the popular board game, Monopoly. Meanwhile, Hasbro’s decision to focus on its branded entertainment strategy shows a commitment to refining its operations and maximizing its strengths. This deal presents exciting opportunities for growth and collaboration in the entertainment industry and demonstrates the resilience and adaptability of these market-leading companies.