Robert Eckert

Mattel (NYSE:MAT) is buying Thomas the Tank Engine maker Hit Entertainment for $680 million in cash in an effort to revive its pre-school business with the world's most famous blue toy train.The El Segundo, Calif.-based manufacturer of Barbie and HotWheels toys has succumbed to lackluster sales over the last several years in its toddler segment. Its once dominant Fisher-Price brand, which targets the same audience as Thomas the Tank, only made up $1.83 billion of its  $5.86 billion in revenue last year.The company's buy of Thomas & Friends, which has been popular among toddlers and children around the world for nearly 67 years, making up about 80% of Hit's profit, will be key to  Mattel's efforts in revamping those sales."With more than half of the Thomas & Friends revenue generated from non-toy products, this transaction will marry Mattel's global marketing, distribution and brand management capabilities with HIT Entertainment's global programming and licensing expertise to accelerate...

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