“We think Netflix is best strategic fit on leading position in engagement level as well as original content, differentiating itself from pure aggregators of content,” J.P. Morgan analyst Samik Chatterjee said on Monday. “We believe there is value to acquiring the most successful player in this space, which is hard to replicate with a smaller player in this market.”
Chatterjee notes that the purchase would likely command a sizable premium. If that premium was 20 percent, it would likely cost Apple $189 billion, the analyst speculates. Netflix has current market value of $148 billion and $7 billion in net debt.
The note from Chatterjee outlines three industries the firm thinks would be a good fit for Apple to make strategic acquisitions and names three firms the company should buy including Netflix, Activision Blizzard and Sonos. This is speculation from Chatterjee but comes as Apple long run of growth from the iPhone begins to dwindle.
The analyst is just speculating in the note and does not have any information that a deal is on the table. Chatterjee even notes how the combination of Apple-Netflix is unlikely.
“We believe Apple can drive synergies between its leading position in smartphones and the rapid transition of video consumption to mobile to drive stronger services growth,” Chatterjee said. “We find Netflix as the best strategic fit, although we appreciate a combination is less likely as Netflix is unlikely to be a seller for a modest premium.”
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