Analysts and reports have consistently speculated that Apple would be interested in purchasing Disney. This approach has considerable risks as it may be hampered by regulatory hurdles, and it is not uncommon for such huge mergers to be unsuccessful and cause overall loss in value. On top of that, Apple tends to avoid such massive acquisitions, and there is minimal evidence that they desire to buy Disney.
For years, analysts and reporters have speculated that Apple may buy Disney, a company with a market value of nearly $150 billion. Despite the historically close ties between the two companies, such as Apple co-founder Steve Jobs becoming Disney's largest individual shareholder after Disney acquired Pixar for $7.4 billion in 2006, Apple almost never purchases name-brand companies, and M&A isn't in Apple's DNA. Its largest takeover was just $3 billion for Beats Electronics in 2014. Now, with Apple's market capitalization hovering around $3 trillion, and Bob Iger believing they may have merged had Jobs still been alive in 2019, it seems that the idea of Apple buying Disney is still unlikely. While Apple has the financial resources to make such a purchase, buying Disney might not be a wise decision for the company, as they have no experience in running theme parks, selling consumer products, managing dying cable TV, nor growing the ESPN business. Moreover, although Disney content could help with Apple device churn and subscription revenue, and may be useful for its AR hardware headset, these benefits may not be enough of a reason to undertake such an acquisition. Ultimately, my 10-year-old rule still stands: No, Apple will not buy [insert company of your choice here].
In spite of the perks that Apple CEO Tim Cook may find alluring in the notion of owning Disney (think free Disney World rides for Apple employees and content synergies for device owners!), it is highly dubious that regulators would permit a deal to take place. With Lina Khan at the Federal Trade Commission, which has endeavored to curtail enormous tech purchases during her command, it appears highly unlikely that the US government would allow Apple to raise its preponderance over the worldwide economy. Even if Apple and Disney sought a legal challenge in order to win approval – as the business sectors don't have much in the way of overlap – the process would be time-consuming and precarious, leading to greater uncertainty for both companies.
Admitting, for the sake of argument, that Apple is actually aiming to purchase Disney, and presuming that Disney sells or disposes its traditional cable assets to avoid stagnant businesses that could possibly weigh down Apple's earnings, in addition to the regulatory setting becoming so that the government would be more mindful to an agreement, the two distinct and firmly established cultures would have to come together, and this could potentially prove to be a maelstrom. Historical media mergers, such as AOL and Time Warner, AT&T and Time Warner, CBS and Viacom joining forces, and Discovery and WarnerMedia merging, have all unveiled immense value destruction.
So, could Apple eventually buy Disney? Sure. Nevertheless, I could not be more averse to change my M&A fundamental policy.
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