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Business giants Apple and Disney could merge into one giant, which experts say would benefit both companies.
Apple Inc. and The Walt Disney Company have had a long-standing relationship, with Disney CEO Bob Iger being a friend of late Apple founder Steve Jobs.
While Apple and Disney are said to be at loggerheads, any merger or acquisition would be "definitely" rejected and would meet with "shareholder lawsuits," a financial lawyer said.
The teamwork talk reignited when Needham analyst Laura Martin told clients the acquisition would give Apple 15-25% more value. So what are the chances of a merger or acquisition between the two now?
The history of Apple and Disney
Steve Jobs is the most obvious connection between technology companies and entertainment giants, because he is the most famous co-creator of Apple and the last CEO.
In the year He was the majority shareholder of the animation studio Pixar before it was sold to The Walt Disney Company in 2006. As part of the deal, Jobs remained a member of the Walt Disney Company's board of directors until his death. In 2011 .
Disney's acquisition of Pixar never happened after negotiations with former Disney CEO Michael Eisner failed. In 2004, Pixar announced that it would never work with Disney. In the year When Iger replaced him in 2005, he repaired the relationship and bought Disney Pixar for $7.4 billion.
Iger later announced in 2011 that Apple, Inc. The board of directors was named, but he left the post in 2019 as the two companies prepared to compete in the streaming wars.
There is currently no overlap between Apple TV+ and Disney+ content (both launched in November 2019). The collaboration between the two is certainly bad news for rivals like Netflix and Prime Video.
A merger between Apple and Disney isn't just a third-party guess, as Bob Iger himself envisioned what the joint venture would look like in 2019.
"If Steve had been alive, I think we would have merged our companies or discussed it as seriously as possible," Iger wrote in The Ride of a Lifetime: Lessons From 15 Years as CEO of The Walt Disney Company.
Bloomberg's John Ehrlichman wrote about the crossover's various positions in a Twitter thread on Sunday, citing the "connective tissue" between the two companies. As Disney pulls out of Metaverse, Apple touts $1 billion commitment to launch its own mixed reality product
Under Iger's leadership, Disney has acquired companies such as Pixar, Marvel, Lucasfilm and 21st Century Fox, but it may be Disney's turn to take control.
Apple Inc. and The Walt Disney Company did not respond to requests for comment from Newsweek .
Current reviews of Apple and Disney
Although Disney is a famous brand and a very successful company, Apple, Inc.
Apple is considered the best-selling technology company in the world. In the year In 2022, its revenue will be 394.3 billion dollars, and last month it became the largest company in the world by market capitalization at a value of 2.62 trillion dollars.
In comparison, The Walt Disney Company's It had the 55th largest market capitalization in March 2023, valued at $182.56 billion.
Cristina Curtis, an economist and consultant, said that while both companies are very successful, a merger would increase profitability.
© Drew Angerer/Getty Images Walt Disney Company CEO Bob Iger with Apple Inc. CEO Tim Cook attend Allen & Company's Sun Valley Annual Conference on July 6, 2016 in Sun Valley, Idaho. Every July, some of the world's richest and most powerful business leaders in media, finance, technology and politics gather at Sun Valley Resort for a special week-long conference. Anger/Getty Images
"The combination of these two powerful companies will result in significant growth from their respective client bases," Curtis Leadership Consulting's founder told Newsweek . Based on the modest increase in the stock prices of the two companies, investors seem to agree.
Shares in the two companies each rose 1 percent last week after Needhams Martin wrote to a client about the merger.
"It's easy to imagine how they can seamlessly integrate their technologies and services and gain more attention from consumers who want to be part of the entertainment value that Apple and Disney offer," Curtis said.
What prevented the integration of Apple and Disney?
As Iger himself suggested, interest in a Disney-Apple merger faded after Jobs' death in 2011.
As the two companies enter the streaming war, the two seem further apart than ever. However, according to Chris Manderson, a financial attorney in Beverly Hills, the two companies have additional features that can benefit each other.
“[M&A] is driven by the fact that it's easier to buy something than to build it. Disney is the most recent owner of the property, but the content drives these mergers. Apple owns the platform and distribution, and Disney provides the content,” Manderson, a partner at Ervin Cohen & Jessup LLP, told Newsweek .
© Stephen Lam/Johannes Eisele/Getty Images Apple, Inc. CEO Tim Cook speaks at a 2016 product launch event and Bob Iger, CEO of The Walt Disney Company, holds a 2016 press conference at Shanghai Disney Resort. Stephen Lamb/Johannes Eisele/Getty Images
While some may see it as a perfect match, partnerships with large companies don't always work out the way people expect. Manderson said it was difficult for AOL and Time Warner to sync up.
"Disney has successfully merged many companies, but they are all in the entertainment industry," he said. "Here they are merging with a hardware company. It's hard to say whether it will work. The main reason the merger failed was because they didn't integrate the company's culture and processes."
He also warned that any attempt to merge with Apple would face legal opposition.
Whenever a public company is acquired, it is Disney's intention that the seller's board sue for breach of fiduciary duty. There will be allegations that they did not handle the sales process properly. shareholders,” Manderson said.
"Of course there will be a shareholder dispute, but that probably won't stop the takeover. You can apply for a court order to stop the takeover, but it's really just a search warrant to legally extract money from the board. These lawsuits are almost always resolved, usually with small purchase price adjustments." And with some additional SEC filings.
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