Apple, Inc. could be poised to purchase The Walt Disney Company for approximately $109 billion. That’s if one Wall Street analyst gets her way.
The idea is not a new one: Apple and Disney–the ultimate power couple within the corporate world. Talk of an Apple/Disney marriage has been around for years. In fact, Disney CEO Bob Iger and Apple co-founder Steve Jobs had multiple interactions, though never any intentional meetings to discuss specifics about a possible merger. But many in the business say that Jobs’ death in 2011 played a role in ceasing any kind of Apple/Disney merger.
A merger of those proportions would be unrivaled in the U. S. marketplace if not in the world marketplace. And over the last week, the proposal of such a merger has gained traction as one highly influential Wall Street analyst has crunched the numbers–as number-crunchers do–and come up with an almost unbelievable conclusion: that Apple could acquire Disney in a deal that will ultimately render both entities far more profitable together than they currently are separately.
Needham analyst Laura Martin notes the strength of the companies’ distribution footprint, as well as their respective quality content and firmly believes that such a merger would serve to increase Apple’s worth by 15% to 25%. Hey, it’s not called the “Magic Kingdom” for nothing.
“We believe that great content and a strong distribution footprint are complementary networks,” Martin wrote in a post on Thursday. “That is, both are worth more if they have the other.”
The highly-respected analyst further said that Apple’s strong suit is in distributing content on a global scale, thanks to the more than two billion mobile devices owned by 1.25 billion “affluent” customers around the globe. Martin also says that Disney shows excellence in creating content and using digital screens, theaters, hotels, cruises, and theme parks to share, or distribute, it.
“We argue that the best way to think about [Apple’s] valuation, pricing power, competitive advantage period, and barriers to entry is through the lens of 1.25 billion of the wealthiest consumers in the world, using two billion active [Apple] devices an average of 4 hours per day,” Martin wrote.
In the days after Disney’s board removed former CEO Bob Chapek from his post and reinstated veteran CEO Bob Iger in November 2022, talk of Iger deciding to sell to Apple was the topic of trending stories in consumers’ news feed all the world over, but such rumors were quickly squashed, though speculation remained about Iger’s intentions of selling The Walt Disney Company at some point during his take-two as Disney’s chief.
But perhaps the speculation shouldn’t have been so quickly dismissed. After all, under Bob Iger’s administration, Disney has spent close to $100 billion on acquisitions of entities such as PIXAR, Marvel, Lucasfilm, and–the biggest snafu of his history as CEO–21st Century Fox, a transaction for which Disney is still in debt more than $45 billion.
Iger has publicly “lamented” not taking steps to move forward in acquiring Apple years ago, seeing it as “the one that got away.” But as both companies are so large, is it possible there would even be an acquisition? Or would the deal only go down as a merger? That remains to be seen.
If Apple and Disney were to come to an agreement–and Apple submitted a proposal to acquire The Walt Disney Company–that proposal would likely need to include a payment of approximately $109 billion, if Apple were to purchase Disney at its net worth. The net worth of The Walt Disney Company can be calculated by subtracting the company’s liabilities from its assets. As of December 31, 2022, Disney’s balance sheet reported $202.12 billion in total assets and liabilities of $93.25 billion. As such, Disney’s net worth is estimated at nearly $109 billion.
The future is wide-open and far-reaching, and such a deal might not be so crazy after all.