Source: Ted Soqui / Getty
Apple is considering purchasing streaming giant Netflix thanks to the passing of the new GOP tax bill which will give the tech company certain advantages to do so.
The new bill, spearheaded by President Trump, allows large companies like Apple the one-time ability to use their offshore money without being taxed, according to Business Insider. This lets Apple use its estimated $252 billion of overseas money to buy Netflix without having to worry about paying Uncle Sam.
Citi analysts Jim Suva and Asiya Merchant told their clients that the tax benefit has Apple eyeing the company and predicted that there’s a 40 percent chance that the deal will actually go down. The duo made the bold prediction in a memo sent out to their clients.
“The firm has too much cash—nearly $250 billion—growing at $50 billion a year. This is a good problem to have,” said Suva and Merchant. “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 percent of its cash sitting overseas, a one-time 10 percent repatriation tax would give Apple $220 billion for M&A or buybacks.”
Citi also predicted the recent purchase of 20th Century Fox by Disney and gave it a 20-30 percent chance of happening. That deal made sense because it gave Disney access to the Marvel properties that it did not yet own including X-Men and Fantastic Four. Apple buying Netflix seems like it would benefit the tech giant by giving them access to Netflix’s established streaming network and a plethora of original content.
source: complex
