Will Apple Buy Netflix? Citi Analysts Put Odds At 40%

Analysts for Citigroup wrote in a research note they believe there's a 40% chance Apple will buy Netflix with the money it repatriates following the passage of corporate tax reform.

Apple could potentially repatriate hundreds of billions of dollars, giving it plenty of wiggle room for a major acquisition like Netflix.

The analysts, Jim Suva and Asiya Merchant, noted that Apple has been making aggressive plays in the streaming video space, hiring former TV executives and ordering original programming.

"Historically, Apple has avoided repatriating cash to the U.S. to avoid high taxation," the note said. "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 $220 billion for M&A or buybacks."

Of course, Netflix has now reached a scale where Apple may have a better return on investment by pouring money into its own original content efforts, instead of making a massive acquisition. A Netflix buy could cost close to $100 billion -- money with which Apple could attempt to use its platform dominance and sizable coffers to build its own video business.

The same Citi research note, which was written before Disney's offer to buy a large chunk of 21st Century Fox, said that Apple had about a 25% chance of buying Disney with its repatriated money.

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