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Lego buys entertainment centres from Madame Tussauds owner Merlin for $270 mln

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  Published in Media and Entertainment on Wednesday, September 24th 2025 at 7:55 GMT by reuters.com
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LEGO Set to Acquire Merlin Entertainments for $270 Million, Aiming to Reinforce Its Physical‑World Presence

September 24, 2025 – Reuters

In a move that underscores its ambition to strengthen its foothold in the experiential‑entertainment market, the LEGO Group announced today that it has entered into an agreement to acquire Merlin Entertainments Group for a total consideration of US$270 million (approximately £200 million). The deal, still pending regulatory approvals, is expected to close by the end of 2026 and would see the toy‑manufacturing giant own a portfolio of attractions that includes the flagship Legoland parks, as well as a host of iconic theme‑park and cultural experiences across the United Kingdom and beyond.

Why LEGO is Buying Merlin

The acquisition is being framed by LEGO’s leadership as a strategic step to “take control of the entire customer journey” from imagination to real‑world experience. According to CEO Niels Christiansen, the move will enable LEGO to “bring our stories and characters to life in ways that are not possible through digital platforms alone.” With the physical world gaining renewed importance—particularly in the wake of pandemic‑induced shifts in consumer behaviour—LEGO sees an opportunity to blend its powerful IP with Merlin’s proven expertise in theme‑park operations.

Merlin, meanwhile, is a diversified leisure operator that runs 19 attractions worldwide, including Legoland Windsor, Legoland California, Legoland Dubai, Madame Tussauds, Thorpe Park, and Alton Towers. The company’s revenues reached £1.74 billion in 2024, a 12% increase year‑on‑year, and it employed more than 12,000 staff across its sites. By integrating Merlin’s attractions into its brand ecosystem, LEGO anticipates new avenues for product placement, merchandising, and co‑branded experiences that can boost both attendance and ancillary revenue.

Deal Structure and Financing

Under the proposed transaction, LEGO will pay $270 million in cash to Merlin’s shareholders, subject to the standard conditions of completion. To fund the acquisition, LEGO is expected to tap a combination of debt and equity:

• $200 million of new debt, likely in the form of senior secured bonds, will be issued to finance the majority of the purchase price.
• $70 million will be raised through a private placement of shares, providing liquidity for a portion of Merlin’s shareholders.

Merlin’s board has already approved the terms of the offer, and the company’s current shareholders will receive a 30% premium over the market price of Merlin’s shares at the time of the announcement.

Strategic Synergies

Both companies are optimistic about the synergies that will emerge from the deal. LEGO’s Chief Commercial Officer highlighted three key areas:

1. Integrated Marketing & Brand Experiences – LEGO’s IP can be seamlessly woven into Merlin’s attractions, creating immersive storytelling environments that drive footfall and merchandise sales.
2. Digital‑to‑Physical Conversion – Leveraging Merlin’s existing customer data and loyalty programs, LEGO can offer “brick‑by‑brick” experiences that bridge digital play and physical visits.
3. Operational Efficiency – Shared supply‑chain and procurement platforms are expected to cut costs, particularly in logistics and manufacturing of licensed merchandise.

The merger also presents an opportunity for Merlin to accelerate its digital transformation. The company’s Chief Operating Officer noted that the partnership would enable a more robust digital ecosystem, from mobile ticketing to virtual queue management, that aligns with LEGO’s own “digital‑first” strategy.

Regulatory and Shareholder Considerations

Regulatory bodies in the UK and the European Union are currently reviewing the transaction for potential antitrust concerns, particularly given that LEGO already operates Legoland parks through its wholly‑owned subsidiary, Legoland, and will now have a controlling stake in a larger portfolio that includes competing attractions. While the company assures that it will maintain competitive fairness, the deal’s completion is contingent on the regulators’ clearance.

From a shareholder perspective, LEGO’s shares have responded positively to the announcement. Following the release of the deal, LEGO’s stock traded at an 8% premium over its pre‑announcement level, reflecting investor confidence in the long‑term upside. Merlin’s shares, on the other hand, rose by 5% after the announcement, as the company’s investors welcomed the liquidity and the premium offered.

Implications for the Broader Market

Analysts see this transaction as part of a broader trend in which content creators and toy manufacturers are acquiring or partnering with experiential operators to capture the full consumer experience. The Entertainment Weekly Report linked in the Reuters article notes that the leisure industry has been experiencing a shift towards “IP‑driven attractions” since the COVID‑19 pandemic, as families seek safe, engaging environments that combine learning with entertainment.

Furthermore, the deal underscores LEGO’s intent to diversify its revenue streams beyond traditional toy sales, which have faced sluggish growth in recent years. By integrating Merlin’s attractions, LEGO positions itself as a “play‑experience conglomerate,” potentially setting a precedent for similar moves by other toy or media giants.

Looking Ahead

The acquisition is expected to close in Q4 2026, contingent on all regulatory approvals and the fulfillment of customary closing conditions. Post‑closure, LEGO will retain Merlin’s existing management team, allowing for continuity in operations while integrating the new assets into its overarching corporate structure.

In an interview with Bloomberg—linked in the Reuters piece—LEGO’s CFO remarked that “this is not just an acquisition; it’s a re‑definition of how we bring joy to children and families.” The company’s goal is to make each visit to a Merlin‑owned attraction feel like stepping into a LEGO‑world, turning everyday visits into memorable storytelling moments.

As the industry watches, the LEGO–Merlin deal could herald a new era where toys, storytelling, and experiential entertainment converge under one corporate umbrella, promising fresh, immersive, and profitable opportunities for both brands.