About Apple and Mergers and Acquisitions
About 10 years ago, I came up with a rule for covering mergers and acquisitions, and it still holds true today. The rule is simple: Will Apple buy [insert company name]? The answer is almost always no.
Apple rarely acquires well-known companies. Its largest acquisition was Beats Electronics in 2014 for $3 billion. Apple is very particular about its culture and focus. In contrast, Microsoft has made several big acquisitions, including Activision Blizzard for $69 billion, LinkedIn for $26 billion, and Nuance Communications for $20 billion, among others. But mergers and acquisitions are not in Apple’s DNA.
There has been speculation for years that Apple might be interested in buying Disney, a company valued at nearly $150 billion. The ties between Apple and Disney are strong, with Apple co-founder Steve Jobs becoming Disney’s largest individual shareholder after Disney acquired his company, Pixar, in 2006. However, with Apple’s market capitalization nearing $3 trillion, buying Disney wouldn’t be a significant transaction for the company.
In his autobiography, Disney CEO Bob Iger mentioned that he believes Apple and Disney might have merged if Steve Jobs were still alive. Iger has also maintained a connection with Apple since his return as CEO, even gifting Disney employees copies of a book about Steve Jobs.
While a merger between Apple and Disney might seem like a perfect fit, it’s unclear if Apple has any interest in buying Disney. Apple focuses on its core competencies and doesn’t have experience running theme parks or selling the consumer products that Disney offers. Additionally, Apple has only made small forays into owning sports rights and creating content for Apple TV+.
Regulatory and culture issues also pose challenges to a potential Apple-Disney merger. With the current regulatory environment and the Federal Trade Commission’s scrutiny of big tech acquisitions, it’s unlikely that the U.S. government would allow Apple to further increase its dominance. Even if the regulatory landscape changed, merging the distinct cultures of Apple and Disney could be difficult and potentially lead to value destruction.
In conclusion, while it’s not impossible for Apple to buy Disney in the future, it goes against Apple’s usual approach to acquisitions. As of now, my rule remains unchanged: Apple is unlikely to buy [insert company name].
