It's time for Apple to make a deal.
When it comes to M&A, the clock has struck midnight in Cupertino, according to Wedbush's Managing Director Dan Ives. “The company now is going to be laser focused on more significant M&A in content.”
As Apple looks to compete with Netflix’s estimated $15 billion content spend in 2019, Ives thinks it makes sense to look outside Silicon Valley for a deal. “Specifically looking at companies like a Sony Pictures, an A24, an MGM, and we still think of CBS-Viacom as a very viable possibility as an M&A target.”
With a combined market cap of $30 billion, bringing CBS and Viacom back together isn’t out of reach for Apple. With over $225 billion of cash, the tech giant has the firepower to do a major deal. The team from Apple Park though hasn’t pulled the trigger on any major tie-ups since its largest deal ever, in 2014, when it paid $3 billion for Beats Electronics.
Back on March 25, Apple announced its biggest step yet in the streaming wars, with the reveal of AppleTV+. Since then, Disney has also given investors a sneak peak at their entry: Disney+. While pricing and availability for Apple’s video subscription service will be announced later this fall, Disney+ will clock in at $6.99 a month or roughly half the price of a standard Netflix subscription.
Ives thinks the most likely candidate is probably A24, which already has a strategic partnership with Apple. Regardless of the target though, Ives thinks Apple CEO Tim Cook is ready to make a move. “We believe Cook, at this point, has much more of a grip around M&A and, I think, is going to get a lot more aggressive. And that's why there's a number ... of possibilities.”