VTech has entered a merger agreement that will see the firm acquire rival LeapFrog for approximately $72m.
VTech's offer of $1 per share represents a 78.5 percent premium to LeapFrog's Thursday's close of $0.56.
VTech has said that LeapFrog would become its indirect wholly-owned unit.
"We are delighted to have the LeapFrog brand joining VTech, bringing together two of the great names in children’s learning and entertainment,” said Allan Wong, chairman and group CEO of VTech Holdings Limited.
“VTech has been a pioneer in the electronic learning toy category for 35 years. The acquisition will allow us to offer the broadest portfolio of products that enhances the education and development of children across the world, while bringing them fun and joy.”
Bill Chiasson, the Chairman of LeapFrog’s Board of Directors, added: “We believe this is a terrific opportunity for our employees, customers, and shareholders.
“The acquisition and future investment by VTech will be instrumental to helping the LeapFrog brand achieve the mission of helping each child achieve their potential. Importantly, too, this transaction also rewards our shareholders with a significant premium from recent trading levels.”
The announcement follows speculation of another major merger between Mattel and Hasbro.