Is Apple Looking To Buy Netflix?
Could Apple be looking to shake up Hollywood like that earth-shatteringly historic Disney-Fox deal? Rumblings in the industry say yes.
The streaming giant, Apple, has already changed the game numerous times over. Now, it is looking to impact the television world, as Apple, in possession of a surplus of overseas cash, will approach Netflix in an acquisition deal.
Analysts and Business Insider claims that there is a 40% chance that Apple will make a play for Netflix, due to the $252 billion in overseas funds that the company has available to repatriate. Originally unable to bring its foreign earnings back to the U.S. due to federal tax law, President Drumpf’s newly passed corporate tax cut offers companies a one-time allowance to repatriate cash stored overseas without a major tax hit.
Essentially, Apple has beaucoup bucks to make Netflix CEO Reed Hastings an extremely rich man. “The firm has too much cash — nearly $250 billion — growing at $50 billion a year. This is a good problem to have. Historically, Apple has avoided repatriating cash to the U.S. to avoid high taxation. As such, tax reform may allow Apple to put this cash to use. With over 90% of its cash sitting overseas, a one-time 10% repatriation tax would give Apple $220 billion for M&A or buybacks,” Citi analysts Jim Suva and Asiya Merchant said.
Forbes, however, argues that there is good reason to doubt this prediction, writing, “Apple has already committed $1 billion towards creating new shows and their largest acquisition was buying Beats for $3 billion in 2014. Why would they spend $75 billion to buy Netflix? It would be a desperation move that would raise a white flag and signal a major organizational shift in philosophy.”
No word from Netflix or Apple about any sort of deal, plus there haven’t been any reports of talks between the two. Take it how you want it, but if this does happen, it could signal a significant change in how we consume media as we know it.
Source: Business Insider