Could iMickey soon become a reality?
Laura Martin, a Wall Street senior analyst for investment bank Needhambelieves Apple could acquire Disney in a mega merger that would give new meaning to the term “Magic Mouse.”
In a research report, Martin wrote that the companies are “worth more together than separately.”
“Combining Apple’s distribution footprint of 1.25 billion unique customers with Disney’s 570 million consumers reached each year would boost Apple shareholder valuation by 15% to 25%,” she noted.
The total valuation would be about $631 billion based on the current market cap of $2.5 trillion, according to Markets Insider.
Martin said Apple and Disney are “complementary” and combining their two strengths could give them superpowers.
“What Apple does best is distribute content globally to 2 billion high-end mobile devices owned by 1.25 billion unique and wealthy users. And what Disney does best is create AAA content franchises that run across all screens worldwide. spread, as well as in the physical world,” Martin wrote.
Martin also pointed out that both companies are “marketing juggernauts”, capable of charging high prices to their avid fan bases.
Not their first dance
Apple and Disney have a long history of working well together. When Apple launched the video iPod, Disney was one of the first companies to offer their shows on the platform. Disney also bought Pixar, which was led by legendary Apple founder Steve Jobs. Iger and Jobs were good friends.
But good relationships don’t lead to a merger. Rumors that the two companies would merge have been quashed in the past.
Bob Iger, Disney’s newly reappointed CEO, said in a town hall last year that he had no plans to merge with Apple.
“What you’ve read about that is pure speculation,” Iger said.
Still, analysts like Martin believe that a merger is essential in a highly competitive market.
“I think Apple is doing streaming very mediocre. They just said they were going to do a billion dollars in movie financing. That’s kind of laughable because these companies that compete in content businesses spend $30 billion a year. Even Netflix gives $20 billion a year,” Martin told CNBC earlier today.
“Guess what the Walt Disney Company has: 100 years of some of the best intellectual properties, characters and movie franchises in the world. So to own that forever would actually lower Apple’s costs.”