Analysts Predict That Apple May Purchase Netflix
December saw a major media merger in Disney’s acquisition of 21st Century Fox. However, 2018 may see an even larger deal. A pair of analysts from Citi believe that there is a 40 percent chance that Apple may buy Netflix.
Jim Suva and Asiya Merchant believe that the potential merger may be motivated by the recent tax cut that Congress passed at the behest of President Trump. The new law gives companies a one-time opportunity to retrieve money from overseas accounts without being taxed for that money.
This is particularly important to Apple which holds 90 percent of its cash, roughly $252.3 billion, outside the U.S. Under the previous tax code, Apple would have had to pay a tax rate of 35 percent on that money. The new bill reduces that rate by more than half making it easier for companies like Apple to move their cash around.
In a December note to their clients, the two analysts said that they believe there is a roughly 40 percent chance that Apple would move to acquire Netflix. It is estimated that Apple would have to spend between $85 billion and $105 billion to buy Netflix. Other potential companies that Apple may be considering include Activision-Blizzard. EA, and Take-Two.
Prior to the merger between Disney and Fox, there were rumors of a deal between Apple and Disney though that is less likely now that Disney has purchased Fox.
While this deal remains speculative, it does make sense. Apple has long struggled to get its streaming service off the ground so the acquisition of Netflix would go a long way towards that. However, given the popularity of Netflix, it would be a bit of a shame to see the service become part of Apple’s walled garden so hopefully, if this deal comes to pass, they don’t make too many changes to how Netflix operates.
Eric is an avid tech junkie, gamer, and comic fan. When he's not working on his PC, you'll find him at your local comic book shop.