“The classic M&A risk mitigation strategy is to work with a core theme and then execute. When the pundits speak, Apple’s core is digital technology,” Steve Andriole writes for Forbes. “But what if the core was driven purely by financial metrics across a diverse set of industries and companies that do nothing but reduce Apple’s market risk and make its shareholders richer?”
“The chances of Apple or any company remaining in the Fortune 500 in 2040 is less than 15%,” Andriole writes. “Nobody can create the greatest stuff forever. Not even Apple… let’s take the cash we have, and the amazing market cap we enjoy, and hedge, hedge, hedge. Our shareholders will love us a decade or two from now. Given the value of our stock, we can afford to do things today that we may not be able to do even a year from now.”
There’s no suggestion here that Apple should integrate these companies into any aspect of Apple’s core business. With ownership of, or significant stakes in, these companies (listed alphabetically), Apple will do just fine no matter what happens to the iHouse, the iHospital, or the iWorld:
• Agricultural Bank of China
• China Construction Bank
• China Mobile
• General Electric
• Johnson and Johnson
• JPMorgan Chase
• Lockheed Martin
• Proctor and Gamble
• SAIC, Inc.
• Samsung Electronics
• Toyota Motor
“Ultimately, all this is a hedge against the inevitability of stalled innovation,” Andriole writes. “Yes, that’s right, the inevitability of stalled innovation.
Nobody can create the greatest stuff forever. Not even Apple.”
Read more in the full article here.
MacDailyNews Take: Yeah, Apple should buy Samsung Electronics and… (wait for it)