Apple might buy TV and film streaming service Netflix in the near future, according to analysts.
Citi analysts Asiya Merchant and Jim Suva say there's a 40 per cent chance that Apple could snap up the streaming service. This is thanks to a corporate tax cut granted by President Donald Trump, combined with a one-time offer to repatriate the money international but American-born companies have back into the US.
According to the analysts, this could mean Apple has $220 billion to spend on acquiring other companies.
"The firm has too much cash – nearly $250 billion – growing at $50 billion a year," the analysts told clients. "This is a good problem to have.
"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 per cent of its cash sitting overseas, a one-time 10 per cent repatriation tax would give Apple $220 billion for M&A [mergers and acquisitions] or buybacks."
Apple would need only about a third of that amount of cash to buy Netflix, according to Suva and Merchant.
Netflix would be a tempting proposition for Apple. With over 100 million customers around the world, it could be the springboard Apple needs to launch its TV- and film-producing aspirations. However, this would rely on Netflix being willing to sell.
Source: Business Insider