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Apple may acquire Netflix, suggest Citi analysts

03 January 2018
Apple may acquire Netflix, suggest Citi analysts

Not only that, but the opportunity to repatriate money held in offshore accounts without paying a bunch of extra taxes means that Apple can bring the cash necessary for the purchase back into the States. It should be noted that neither Apple nor Netflix have made any mention of a deal, or have there been any previous reports of talks between the two companies. "With over 90 percent of its cash sitting overseas, a one-time 10 percent repatriation tax would give Apple $220 billion (roughly Rs. 14 lakh crores) for mergers and acquisitions (M&A) or buybacks", they added. If a 30 percent premium is added, it could well be a purchase of almost $108 billion, much higher than the $3 billion Apple spent to purchase Beats Audio - its largest acquisition so far - in 2004. And Apple's method of content delivery - while robust and market-defining within the iPhone and Mac ecosystems - doesn't align with the way viewers are now streaming Netflix and its competitors. Acquiring Netflix will also allow Apple to get a large base of original content.

Citi reckons that Apple could repatriate about $220 billion in cash it has sitting around outside the U.S.in 2018, and that the company would only need spend about a third of that cash to gobble up Netflix. The new tax law also lets companies repatriate their profits to the USA for a low, one-time tax.

Who do you think Apple should attempt to buy?

In a December note sent to clients, Suva and Merchant marked Netflix as the company Apple was most likely to buy.

Obviously, this is all just speculation, and the 40% chance Citi gives the deal is certainly far from certainty. Let us know below.

Furthermore, Apple has reportedly invested $1 billion in producing unique video content, which the Wall Street Journal says could yield up to 10 new shows. The company's been struggling to present customers with binge-ready TV shows and movies like competitors Netflix and Amazon Prime Video.

Apple in November ordered two seasons of a scripted video series starring Jennifer Aniston and Reese Witherspoon that doesn't have a launch date.

But that kind of effort is a drop in the bucket compared to the major players, leaving Apple way behind Netflix, Amazon, and even HBO, according to Variety.