Gamble: Citi analysts see 40% chance of Apple acquiring Netflix

(FinancialPress) — Jimi Suva and Asiya Merchant, analysts for Citi, see a 40% probability of Apple Inc. (AAPL) acquiring online video streaming service Netflix (NFLX) as 2018 rolls in.

The observation stems from the potential for capital repatriation that President Trump brings about with his newly-passed corporate tax cut.

The cut, alongside the one-time allowance of cash repatriation without a major tax hit for companies, will fill the loot box for Steve Jobs‘ brainchild to buy new companies.

Apple‘s cash availability is at an estimated $252 billion – much of it outside of the U.S. and previously difficult to bring back into its main jurisdiction.

Suva and Merchant ranked the most likely M&A candidates for when Apple‘s war chest is filled up – and Netflix got the pole position for most likely to be bought by the tech giant.

The note that outlined the company‘s possible acquisition targets was released before Disney (DIS) materialized its acquisition of Fox‘s studio and TV assets. Before that, Citi gave an Apple/Disney purchase a 20 to 30% chance.

“The firm has too much cash – nearly $250 billion – growing at $50 billion a year. This is a good problem to have,” Suva and Merchant said in their note to clients. “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% of its cash sitting overseas, a one-time 10% repatriation tax would give Apple $220 billion for M&A or buybacks.”