UPDATE 2-Mattel to buy Mega Brands to build up against Lego
* Deal to expand Mattel's construction, arts and crafts toys
* Offers C$17.75 per Mega Brands share, premium of 36 pct
* Shareholders holding 39 pct of Mega Brands support deal
* No rival offer expected - analyst
* Mattel shares up 0.5 pct
By Maria Ajit Thomas
Feb 28 (Reuters) - Mattel Inc, the world's No. 1 toymaker, offered to buy Canada's Mega Brands Inc for about $460 million to better compete with Denmark's Lego, the leader in the fast-growing market for building blocks.
For the past three years, the demand for construction toys, especially Lego's colorful building blocks, has been growing at the expense of action figures and preschool toys - the forte of Mattel and its main rival Hasbro Inc.
That pushed Lego's sales up 10 percent in a sluggish global toy market in 2013, helping it overtake Hasbro to become the No. 2 toy company by sales globally. Mattel's sales rose 1 percent and Hasbro's were flat in 2013. Continued...