SEOUL, Oct. 11 (Korea Bizwire) – Sonokong, one of Korea’s oldest toymakers, has sold a majority stake in its operations to Mattel, an American toy manufacturer best known for its Barbie dolls.
Sonokong Chairman Choi Sin-gyu sold 11.99 percent of his shares to a Mattel affiliate, Mattel Marketing Holdings, for 13.9 billion won ($12.9 million), in addition to signing a two-year exclusive distribution and marketing deal for Mattel products in Korea with the exception of games, the company said late Monday afternoon.
The endeavor has rapidly spread hopes that Sonokong will expand its market share in Korea, leading to a spike in its stock price by 18.61 percent on the following day.
But at the same time, the news has bred further concerns that domestic toy firms are losing ground to foreign capital, especially following last year’s sale of another Korean toy company, YoungToys, to Hong Kong-based investment firm PAG Asia Capital.
Sonokong was established in 1974, initially as a faucet manufacturer. It rapidly expanded into the toy market in the mid-1990s, and quickly became the industry leader with 70 billion won in annual revenue by 2011.
Although the company has suffered a downturn since, it made a strong comeback last year, driven by the popularity of its Turning Mecard lineup that includes robots, mini-cars, and collectible cards.
“There aren’t going to be any changes to our management staff,” said Sonokong CEO Kim Jong-wan. “We’ll be continuing our development of existing toy ventures, including Turning Mecard.”
By Lina Jang (email@example.com)