Netflix has made a number of successful shows, including The Crown.
Netflix has made a number of successful shows, including The Crown.
The polarising corporate tax cut championed by US President Donald Trump and the Republican Party has left tech giant Apple very cash rich.
Under the new bill, which was signed into law just before Christmas, Apple will be able to bring US$252 billion ($351b) of its overseas cash back to the United States at a tax rate of 15.5 per cent versus the previous 35 per cent, DailyMail.com reported.
That would leave the company with approximately US$220b after taxes.
And with all that cash on hand, talk is now turning to what companies Apple might try to scoop up, and one stands out above all others according to CitiGroup analysts - Netflix.
Analysts Jim Suva and Asiya Merchant said in a note to investors last month that there is a 40 per cent chance that Apple would make a play to buy Netflix.
"The firm has too much cash — nearly $250 billion — growing at $50 billion a year," wrote Suva and Merchant.
"This is a good problem to have. 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 per cent of its cash sitting overseas, a one-time 10 per cent repatriation tax would give Apple $220 billion for M&A or buybacks."
It would make sense for Apple, who have dominated a number of markets such as music but failed to find a foothold in the worlds of television and movies, where they have been surpassed by Netflix, Hulu and Amazon, among others.
The purchase of Netflix would not deplete their war chest either, with the streaming giant currently valued at US$85b.
This means that should Apple move the cash back they would also be looking to grab some other properties.
There are however a number of reasons why this sale is highly unlikely, starting with the purchase price.
Apple paid US$3 billion for Beats in 2014. Picture / Getty Images
Apple has been reluctant to splash out large amounts of cash to acquire other companies, and the most the tech giant has ever put up was back in 2014 when it paid US$3b for Beats.
That is also the only purchase Apple has made that was over nine figures, with the next highest being the US$400 million it recently paid for Shazam.
In comparison, Disney has paid US$7.4b for Pixar (2006); US$4b for Marvel (2009); US$4b for LucasFilm (2012); US$1.5b for BamTech (2015); and to top it all off, US$52.4b for parts of 21st Century Fox (2017).
Disney meanwhile is listed as the second-most likely company that Apple would acquire according to Suva and Merchant.
And while Apple may not have had major success in streaming, that seems very likely to change thanks to an announcement in November that the company was in production on their first scripted series.
There is no guarantee that the show will be successful, but given the fact that it stars Reese Witherspoon and Jennifer Aniston it is likely to be a strong performer.
That series was given a two-season order after Apple won an aggressive bidding war, but it remains unclear how they will release the program.
At the same time, Apple is also set to revive the fantasy and science fiction program Amazing Stories that ran in the 80s, and will be bringing back the creator of the show to work on the project - Steven Spielberg.
Bryan Fuller, the beloved creator of cult classics such a Pushing Daisies, Wonderfalls and Dead Like Me, is also attached to produce.
There is also a chance the company would try to buy back shares, which would result in high dividends for its shareholders.
And while Apple will surely move some portion of its overseas money back, there is a very good chance that it keeps a good amount of the cash where it is, based on their cautious nature in the past.
