“Could a growing company that makes most of its money selling to individuals in China breath life into a shrinking giant that sells to enterprises?” Peter Cohan writes for Forbes. “If the acquirer is Apple and the target is IBM, the answer is maybe. And there are three reasons that such an improbable merger might make sense.”
“Tim Cook knows IBM. Cook worked at IBM from 1982 to 1994,” Cohan writes. “In July 2014, IBM and Apple partnered ‘to deliver Apple technology to big business in July 2014,’ according to the Wall Street Journal.”
“Apple can afford to make the buy,” Cohan writes. “IBM’s market capitalization is currently $171 billion. Let’s assume that Buffett would be willing to part with his shares for a 20% control premium — meaning that IBM might cost Apple $205 billion.”
“IBM needs help with execution,” Cohan writes. “Ultimately, such a deal would only make sense if Apple could figure out how to turn IBM into a company that grows fast by selling products that businesses want to own. On the other hand, perhaps this is an execution challenge that is beyond the ability of any human being to master.”
Read more in the full article here.
MacDailyNews Take: Apple buys the original Big Brother? While the neatness of the saga’s ending would be delicious, currently Apple can’t even master the challenges of shipping a watch, so integrating such a monster as IBM into the company might be troublesome, to say the least, or even deadly to one of both. Work with IBM and use them for what they can deliver, business customers, where “nobody ever got fired for buying IBM” even when what they’re selling today are iPads for Apple.
Huge M&A deals are a can of worms.