Mattel Inc on Wednesday snatched back rights to produce toys based on Walt Disney Co's "Frozen" franchise and Princess lineup, more than seven years after losing it to rival Hasbro Inc.

The reunion will bring popular Disney characters, including "Cinderella" and "Snow White," to Mattel, which will also make toys based on characters in newer animations such as "Moana" and start selling them from 2023.

New licensing deals have become crucial for US toymakers as the demand for dolls and action figures touched all-time highs during the pandemic, with customers spending more on toys to keep children entertained.

Mattel did not disclose the financial terms of the agreement, which follows similar ones with Disney for Pixar Animation Studio's "Toy Story" and "Cars" franchises as well as "Lightyear."

After losing the license to Hasbro in 2014, Mattel had turned its focus to refurbishing its Barbie brand by launching a range of gender-neutral dolls as well as dolls with different skin tones.

Separately, Hasbro, which has been selling Disney Princess and "Frozen" dolls since 2016, said it had renewed its licensing deal with Disney-owned Lucasfilm for "Star Wars" and would restart making products based on "Indiana Jones".

Mattel shares were up 6.5 per cent, while Hasbro was down around 2 per cent in premarket trading.

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