Mattel, the US toy giant behind Barbie and Hot Wheels, is to purchase Hit entertainment, the British maker of Thomas the Tank Engine, for £500m in cash.
The deal will see the enlarged group continue to focus on consumer products and toys across a broader demographic thanks to Hit’s specialism in the pre-school market.
Hit Entertainment chief executive, Jeffrey Dunn, said: "It is fitting that the world's premier toy company should become the owner of the world's premier pre-school property. Mattel is a wonderful steward of brands and a great home for the outstanding properties Hit has developed and grown."
The deal is expected to be finalised by early 2012.