Japanese toy giant Tomy will purchase the Illinois-based toymaker RC2 for $640 million. A Tomy subsidiary will offer to buy all outstanding shares of RC2 common stock for $27.90, a premium of about 27.2% over RC2’s closing price on Wednesday of last week, which was $21.93. 

 

According to Business Week, Tomy issued a statement indicating the acquisition will strengthen both companies and create a global platform for growth. RC2 is best known here for its Thomas, the Tank Engine, Learning Curve, Johnny Lightning, and Ertl brands.

 

Tomy merged with fellow Japanese toy giant Takara in 2005 (see “Takara and Tomy to Merge”), but kept the “Tomy” name in the U.S. because Tomy had established considerable brand recognition internationally, mostly in the area of infant and preschool products, whereas Takara had licensed its major brands like Transformers, Beyblades, and Microman (Micronauts). 

 

The acquisition of RC2, which will continue to manage its brands here in the U.S., gives Tomy/Takara a new way to attack the North American market directly rather than via licensing. It should be interesting to see how this plays out over the next few years.