Merger Rumblings As Analysts Predict Apple Will Buy Netflix

by Erik Amaya


Disney’s purchase of 21st Century Fox’s film and television assets led to many fans cheering for the a potential infusion of X-Men into the Marvel Cinematic Universe and the return of the Fox Fanfare to the Star Wars films. But the deal also has a number of negatives attached to it, like the inevitable round of layoffs as redundancies appear across the mega-corporation. Another is the further consolidation of media companies as groups team up to compete with Disney’s market dominance. One interesting contender is Apple, the former computer company who boldly asked “What’s a computer?” in a recent iPad commercial.
According to Business Insider, analysts at Citi recently suggested there is a 40% chance Apple will purchase streaming giant Netflix. They predict the company will use the recent changes to the US tax code and a one-time opportunity to bring in offshore revenue into the country with a minimal penalty to bankroll the acquisition. “The firm has too much cash – nearly $250 billion – growing at $50 billion a year. This is a good problem to have,” said analysts Jim Suva and Asiya Merchant. Bringing that money into the States under the new tax laws means the company will have $220 billion to play with. Meanwhile, they estimated that Netflix would cost only a third of that cash reserve.
At the time of writing their prediction, the analysts also considered the possibility of Apple buying Disney itself. But this was prior to the company’s agreement to buy the majority of Fox. Now, ith Disney holding the cards to Fox’s media library and a majority stake in Hulu and its plans to start a streaming service to rival Netflix, it makes sense Apple might court Netflix, its assets and its subscribers. It also makes sense that Netflix may be interested in a strong media partner.
Of course, this is all speculation. The analysts also considered gaming companies like Electronic Arts and Activision-Blizzard as possible acquisition targets for the company. Tesla even makes their graph with a 5% probability. What is inevitable, though, is Apple diversifying its reach in the near future.
And that’s only the beginning as the media giants clash like … well, like titans. It remains to be seen, though, which will emerge as the Kraken.
(h/t: Slashfilm)

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