Occasionally, we hear rumors about Apple’s plans to acquire important companies, such as Disney, Netflix, Tesla, or Peloton. Even though these names would like to be part of the world’s most valuable company, nothing has become a reality.
Apple’s latest major merger occurred nearly 10 years ago when they spent $3 billion to acquire Beats. Why don’t they aggressively buy companies that are dominant in high-potential industries?
According to BGR, finance is not an issue for the company holding 165 billion USD in cash reserves. They don’t buy Netflix or Disney for other reasons.
Firstly, Apple avoids large merger and acquisition deals that could run into antitrust complications. If they were to acquire Spotify, Sonos, or Peloton, the deal could put the Cupertino giant under the scrutiny of regulatory agencies, similar to what happened to Amazon and Microsoft.
Microsoft is currently attempting to finalize a $69 billion deal with Activision Blizzard. Regulators and governments believe this could be a major issue for competition in the video game industry.
While many companies believe that large mergers and acquisitions are a good approach, Apple is betting on acquiring small start-ups operating in new fields. Additionally, Apple wants to return the majority of the accumulated cash to shareholders through stock buybacks and dividends, according to Bloomberg.
“Not doing a big deal doesn’t affect them. If nothing’s broken, don’t fix it. I’m happy with Apple’s stance,” Gregg Abella, CEO of Investment Partners Asset Management, a firm that holds Apple stock, told Bloomberg.
Logan Purk, an analyst at Edward Jones, shares the same view. “If Apple tries to do a big deal outside its normal course of action, that would worry me. It moves beyond normal course of action to the point where you would have to ask why,” he said.
Apple is currently under close scrutiny regarding issues surrounding the App Store. Therefore, they will not risk a merger deal that attracts regulatory attention. For years, Apple has been in the habit of acquiring small startups that are capable of challenging larger companies in the same field.
@Zing News
Source: Vietnam Insider