There is a 40% Chance Apple Will Acquire Netflix [Citi]

There is a 40% Chance Apple Will Acquire Netflix [Citi]

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There is a 40% chance that Apple will acquire Netflix, according to a new report from Citi. Analysts Jim Suva and Asiya Merchant says that President Trump's cut in corporate taxes and the one-time allowance for companies to repatriate overseas cash will grant Apple a much larger war chest to buy companies.

"The firm has too much cash – nearly $250 billion – growing at $50 billion a year. This is a good problem to have," Suva and Merchant told clients. "Historically, Apple has avoided repatriating cash to the US 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."

It's estimated that Apple would only need a third of that to buy Netflix. The acquisition would also align with its recent content creation efforts.

According to Citi, Apple's second most likely acquisition target is Disney at around 25% probability; however, the investor note was written before Disney announced its Fox acquisition. Tesla is listed at around 5% likelihood.

Check out the chart below and let us know which of these companies you'd want Apple to acquire.

[via BI]

Justabrake - January 3, 2018 at 9:31am
Monopoly - Apple wants it ALL
joshWUa - January 3, 2018 at 4:58am
So Netflix can be more expensive? No thanks if that happens I’m done with it. Then again T-Mobile has it for free anyways lol.
Antonio Julio Sousa - January 2, 2018 at 10:11pm
The axis of the graphic are absolutely dumb. These are the axes you should use when analyzing risk and not the benefits of a M&A. And the probabilities shown are absolutely subjective. Dumb paper done by some inexperienced folks at City.
Ocanefun - January 2, 2018 at 5:43pm
The first thing that comes to mind with that is price increase which would suck since many people do not have the budget to spend any more. I have had Netflix for about 11 years and this might kill it for me. However, it might mean a lot more quality programming and hopefully the better movies would be released faster without the ridiculous high price of iTunes.
jbiRd72 - January 2, 2018 at 1:15pm
And they said it was gonna be Armageddon with Trumps tax plan. Dems the next Zeppelin. Like MySpace. Lol. Ha ha ha. Come on Netflix!!!!
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