confirmed a deal to sell its troubled Learning Company unit to
Gores Technology Group
for almost no cash and the right to a share of the company's future earnings.
A report in
The Wall Street Journal
said the sale is unlikely to net the company even 10% of the hefty $3.5 billion it paid over a year ago. The ill-fated acquisition racked up nearly $300 million in losses and led to the resignation of CEO Jill Barad. No sale price was disclosed but Mattel said it expects to record a loss from discontinued operations of $430 million from the sale.
article put the acquisition on par with
disastrous purchase of beverage company Snapple, which was sold for $300 million just three years after the $1.7 billion buy.
Mattel also said it will streamline U.S. headquarters, slicing its work force by 10% or about 350 jobs. The company will also lower its dividend to an annual 5 cents a share from a quarterly 9 effective immediately. Over the next three years, all the restructuring and special charges will generate about $200 million in pretax savings. The $250 million of pretax costs for the restructuring will be recorded over a two-and-a-half-year period.