Why Apple does not give in to mega-acquisitions despite its $ 225 billion pot


Is this the beginning of an inflection in Apple's historical strategy in acquisitions? The Cupertino group would be about to put $ 1 billion on the table
to buy Intel chips for modems.

An amount that is not colossal for a tech giant and third world market capitalization. Especially since Apple is sitting on a bouncy cash amounting to $ 225.4 billion. A pot without any equivalent in the world.

But this treasure of war is not synonymous with buying fever at Apple. Certainly, many companies regularly fall into the purse of the US group – in May, Tim Cook assured that Apple had bought between 20 and 25 in the last six months. But these are mostly start-ups or small companies, and none of these operations has exceeded one billion dollars.

To date, the
purchase of Beats helmets,

    for 3 billion in 2014, remains its largest acquisition. The purchase of one part of Intel's business would be one of the largest acquisitions in the history of the California firm.

"Apple's DNA is not about making big acquisitions"

These amounts are, however, light years away from a Facebook who had signed a check for $ 22 billion for WhatsApp five years ago, a Microsoft that
had his hand on LinkedIn

    ($ 26 billion) in 2016, or more recently from IBM which has
acquired Red Hat for 34 billion.

Netflix, Tesla, Nintendo …: In recent years, the rumors of a mega-acquisition of Apple have multiplied without ever leading to a single acquisition of magnitude. " We look at many companies, including big companies. So far we have not found one that causes a "Wow" but I never excluded this possibility Tim said
Cook at the beginning of the year.

" Apple's DNA is not to make big acquisitions, it's not in the culture of the group ", Says Benoît Flamant, head of equities at the Swiss bank Corraterie Gestion. " This goes back to the Steve Jobs era. The logic is rather to develop internally ". The group has also gradually become a prisoner of its shareholder remuneration policy. Since 2015, the group of
Tim Cook redistributed them $ 363.8 billion,

    via dividends and especially massive programs of share buybacks.

" Over the years, Apple's stock has become a stock market value. It's a very nice, well-managed machine that redistributes a lot of value to shareholders ", Benoît Flamant argues. " But if the group touches on this, the course may be slaughtered. In the case of large acquisitions, it seems complicated for the shareholders to rejoice and support the transaction. "

The air hole of the iPhone

But in recent months, the context has changed for Apple. His iconic product and milk cow,
the iPhone, went through an air hole

    and the group set the course for services (streaming music and video, iCloud, bank card, etc.) to try to offset, eventually, this reversal of trend.

A paradigm that could encourage the group to get hold of the portfolio for major acquisitions, with a view to strengthening itself in new sectors where it sets a foot.

Since early April, M & A manager Adrian Perica now reports directly to Tim Cook. In the same way as the head of the design, the financial director or that of the logistics. Only about twenty senior executives at Apple enjoys this "status". A small revolution in the country of Cupertino that proves that the issue of "deals" is today as major as the others at Apple.


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