Investors and analysts have long dreamed of Apple buying Disney as such a deal would likely turn Apple into a media superpower and generate synergies across its entire ecosystem.
When Steve Jobs passed away in 2011, he owned more shares of Disney than he did of Apple. He had gained that stake through his sale of Pixar to Disney in 2006. Since then, many people have dreamed of a merger between the two iconic American companies.
Disney CEO Bob Iger floated that idea in his 2019 memoir and even claimed in a 2021 interview that Jobs would have supported a merger if he had lived. Last November, an unnamed insider claimed Iger could sell Disney to Apple, but Iger denied those rumors. Needham analyst Laura Martin recently revived that idea in a research paper that claimed an acquisition of Disney could easily boost Apple’s valuation by 15% to 25%.
Apple could buy Disney for three reasons: It would expand its services segment, reduce its dependence on the iPhone, and potentially generate synergies in terms of marketing, bundling strategies, and the collection of customer data.
Those possibilities are tantalizing, but the acquisition would be a bad idea for three reasons: the hefty price tag, the acquisition indigestion, and the mismatched operating margins.
MacDailyNews Take: Tim Cook has shown no appetite for mega acquisitions. Disney’s price tag would be at least $200 billion. Apple’s largest acquisition ever occurred in 2014, when the company acquired Beats Electronics for a mere $3 billion, a relatively paltry drop in the bucket (in Apple’s last-reported quarter, the company posted revenue of $117.2 billion. Apple’s revenue for calendar 2022 was $387.537 billion).
Please help support MacDailyNews. Click or tap here to support our independent tech blog. Thank you!
Support MacDailyNews at no extra cost to you by using this link to shop at Amazon.