Sadly, Mattel would be the big brother of the merger, based on size, but completely ignoring the fact that they've been flagging for years. Mattel does more "girl" toys, while Hasbro dominates the "boy" toys. However, I think Hasbro does more girl stuff than Mattel does boy stuff. Without hotwheels and the WWE license, Mattel doesn't exist in the blue isles. Now that they are losing the disney "frozen" stuff to Hasbro, along with Hasbro's MLP line, Big-H should be improving in the pink isle too.
I look at this, and my first thought is, "What would Hasbro get out of a merger?" Mattel would get to give up on boy toys because they suck at it, and they'd get back the girl market they've been shedding... but Hasbro gets what? New fat Barbie? Toy Story dolls?
Let's face it, the DC license would likely still play second fiddle at Hasbro to Marvel and SW. Disney is such a big part of the Hasbro pie now, they can't afford to show Warner Bros any preferential love.
I still think there is a bigger chance Disney buys Hasbro than Hasbro merging with Mattel. It's probably just a stunt to get their shares up before selling out.