Apple could buy Netflix in 2018. The new corporate tax cuts made into law by President Donald Trump would allow the company to repatriate its foreign cash stash, giving it enough money to make such a big purchase.
There is a 40 percent chance of Apple acquiring Netflix in 2018, according to a Business Insider report, citing Citi analysts. According to the report, the purchase would happen thanks to the new tax law passed by congress and enacted by the President of the United States Donald Trump in mid-December, which establishes an important tax cut for American businesses. The tax law could allow companies to repatriate their profits made abroad without a significant fiscal impact.
This will give Apple greater possibilities to buy new companies because, says the report, the Cupertino giant has about 252 billion dollars in cash, mostly in foreign jurisdictions, which previously it could not afford to repatriate to the United States.
“”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,” says the report.
Analysts Jim Suva and Asiya Merchant say that Apple would need only a third of the previously stated $ 250 billion.
Apple has struggled for years to enter the television or film market. Although iTunes has been a great success for the company, viewers have increasingly migrated to services such as Netflix, Amazon Prime or Hulu.
In the past month of November it was reported that Jennifer Aniston and Reese Witherspoon would be in Apple’s first scripted series: A drama that deals with the lives of presenters of a morning television program. At the moment it is uncertain if the series will be available on iTunes or an entertainment company like Netflix.