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.”