Lego said today that it is leaving its Legoland theme parks business to concentrate on construction toys, ceding its theme parks to investors intending to create a giant family entertainment group.
A new family attraction operator, including theme park operator Merlin, is to emerge that will be a leading business of its type in Europe and the ninth biggest in the world, Lego said in a statement. But Lego added that under the arrangement it would end up with 30% of the new venture.
Merlin operates 28 attractions in Europe under the names of Sea Life, Earth Explorer and Dungeons.
Lego, a non-quoted Danish group built on building bricks for children but mired in losses and debt, said it had agreed to sell 70% of its four theme parks, giant versions of its world of play, to US investment fund Blackstone Group for €375m.
Under a deal between Lego and Blackstone Capital Partners IV, controlled by Blackstone Group, and Merlin Entertainments of Britain, a company had been formed to manage the Lego parks. This entity would also manage theme attractions operated by Merlin.
The deal will result in Blackstone Capital Partners acquiring 70% of the shares in Merlin Entertainments. Lego, and another firm, Kirbi which controls Lego, will own the remaining 30%.
The statement said that the new entity would operate attractions drawing 12 million visitors a year. The deal takes effect from July 1, but remains subject to approval by European Union competition authorities, Lego said.
Lego has in recent years faced stiffening competition on the international toy market, with the popularity of its plastic building bricks seemingly on the wane amid the rise of high-tech, interactive computer games and electronic gadgetry.
The company's net losses more than doubled last year to 1.9 billion Danish kroner (€255m).
The Legoland Parks are located in Billund in Denmark, Windsor in England, Guenzberg in Germany and San Diego in the US.
