Apple, which looks set to become the first US$1tn business, is set to repatriate around US$220 billion following US President Donald Trump’s corporation tax cut.
Apple is believed to have more than US$250 billion to fund acquisitions. Netflix currently has a market cap of around US$87 billion.
Video is becoming increasingly important to the consumer tech firm, which has hired Jamie Erlicht and Zack van Amburg to lead original content.
However, it is not clear what platform it will put its original shows such as its reboot of Amazing Stories on, and Netflix would provide an answer to that.
According to analysis from Citi’s Jim Suva and Asiya Merchant, Netflix is by far the most likely acquisition target.
Apple, they told clients, “has too much cash – nearly US$250 billion – growing at US$50 billion a year. This is a good problem to have”.
“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 US$220 billion for M&A or buybacks.”
Netflix’s share price has skyrocketed in the past half-decade, with The Walt Disney Company among major entertainment firms previously linked with a takeover.
However, with Disney now taking on Netflix with its own SVOD service, questions are again being asked about the future of the business.
Disney is now buying the entertainment assets of 21st Century Fox, further highlighting the race to scale that has emerged in the media and entertainment landscape.
Business Insider first reported the Apple-Netflix link.
Neither Apple nor Netflix could be reached for comment.