Apple - which is perhaps the most popular and lucrative computer company in the world at the moment - may be considering an acquisition of Disney to the tune of over $200 billion dollars. Over the course of the past ten-plus years, Apple has created a nice little spot for itself as a premier mover and shaker in the tech industry. Likewise, Disney continues to be a powerhouse when it comes to producing and distributing incredibly successful blockbuster success stories - with the most recent example coming in the form of the $1 billion worldwide hit that is Beauty and the Beast.
The very idea that the two industrial superpowers might consider pooling their resources is one rife with financial possibility. If Apple and Disney were to merge into one company, the newly formed conglomerate would be able to pose a potential source of significant competition to the likes of Netflix - seeing as how Disney holds the rights to countless intellectual properties and subsidiary animation studios such as Pixar.
According to Variety, current speculation has Apple eyeing to buy Disney for upwards of $200 billion in a deal that would create a company whose combined worth would equal $1 trillion. Such a move would facilitate the means by which Apple tech could be integrated into Disney theme parks and an immediate collaboration between Disney’s film properties and Apple’s user base - so long as RBC Capital Markets has their facts straight.
If Apple does in fact buy Disney, then both parties would see highly accretive earnings amounting to a 15%-20% earning boost per share, provided there is a 40% premium deal price and Disney’s outstanding debts are low. Even though the deal would carry a hefty price tag, RBC analysts Steven Cahall and Leo Kulp are fairly certain that the added benefits of Disney’s theme parks and ESPN global streaming sports rights could win Apple over. Speaking to why the deal would be attractive for both parties, Cahall and Kulp commented:
The idea of Apple and Disney operating as one larger company is certainly a hefty bit of information to take in, as the effects of such a merger would signal big changes for the entertainment and tech industries in the very near future. For now, here’s to hoping for the very best for everyone involved however things turn out.
“We like Disney’s fundamentals. Assuming Apple sees the same thing and has the cash, investor anticipation of a prospective transaction only adds conviction to the momentum we see in Disney’s shares.”
Source: Variety
