News Worms
News Worms

Apple tipped to buy Netflix as streaming war gets serious

Apple tipped to buy Netflix as streaming war gets serious

Citi analysts Asiya Merchant and Jim Suva note that the tax cut alongside a one-time offer to repatriate the cash global but America-born companies have back into the U.S. could lead to Apple having $220 billion to spend on snapping up other companies.

"The firm has too much cash - almost $250 billion - growing at $50 billion a year".

According to Suva and Merchant, the likelihood of Apple making the purchase this year is around 40 percent.

On the other hand, Apple may benefit highly from buying Netflix as a result of President Trump's tax policy created to bring overseas corporate money back to the US.

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.

"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", says the two analysts.

This may not be the case for long though, as a new report claims that Apple might be looking to turn Netflix from foe to friend by acquiring it outright. Acquiring Netflix will also allow Apple to get a large base of original content.

Along with the cut, the companies are allowed once repatriate cash that is stored overseas and that too without any major tax hit. Netflix invests heavily on original series and has crafted some of the most popular and talked-about television series we know of. In September 2017, reports poured in that Apple might lease the Culver Studios in California as it plans to pour $1 billion into TV and movie productions.

For many of us, the year 2017 was pretty much spent binging on Netflix. Even though iTunes has been a huge hit in the past with video content, present-day viewers are preferring services like Netflix, Amazon Prime or Hulu. But Netflix has become the giant elephant in the entertainment industry's room, forcing competitors either to step up their streaming content game, go home, or - perhaps - buy what's already working. The boost in original content will result in a $2 billion saving in licensing fees, the analyst said.


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