New year, new wild predictions. Take these with a grain of salt, but analysts are already predicting some big M&A moves could come in 2018—shifts that could dramatically shake up the marketing landscape.
Amazon + Target
Bloomberg sources are sharing an interesting insight via the venture capital firm Loup Ventures, which suggests that Amazon could be eyeing a retail acquisition, specifically Target, this year.
Per Loup Venture co-founder Gene Munster: “Amazon believes the future of retail is a mix of mostly online and some offline. Target is the ideal offline partner for Amazon for two reasons: shared demographic, and manageable, but comprehensive store count. As for the demographic, Target’s focus on mom[s] is central to Amazon’s approach to win wallet share.”
It’s no secret Amazon has been seeking to carve out more of the retail territory for itself. Back in June, Amazon announced its purchase of Whole Foods for $13 billion. As far as how much added space we may be looking at with the possibility of a Target acquisition, Munster predicts the decision would bolster the number of Amazon-owned stores to roughly 2,300.
As one would expect, this wouldn’t be a move that solely stood to benefit Amazon. According to CNBC, over the course of 2017 Target’s stock fell 10 percent while Amazon’s shares experienced a 56 percent growth. A merger would likely result in mutually beneficial upticks in these numbers.
Apple + Netflix
In the entertainment space, Business Insider reports that in light recent of the recent tax reform, there’s a 40 percent chance that Apple could buy Netflix in 2018.
This prediction is per two Citi analysts, Asiya Merchant and Jim Suva, who explained that previously Apple had avoided repatriating any money that was overseas back to the U.S. because it would result in them being hit by taxes twice. With the tax policy changes, they face only a one-time 10 percent repatriation tax leaving them with $220 billion of their at their disposal. Of this sum, one-third would be needed to buy Netflix.
Other potential acquisitions the two considered included Disney, Electronic Arts, Activision, Take-Two, Tesla, and Hulu, though they all ranked lower in terms of the likelihood of actually happening per the chart below.
Just a few short weeks ago, Apple finalized its purchase of London-based music and visual recognition startup Shazam. Given that the market of platforms with original TV and video offerings will undoubtedly continue to remain highly competitive and saturated, it really wouldn’t be shocking if this announcement became a reality as the company looks to outside original content experts to gain traction against its major competitors including Amazon and Google.
As reported in VentureBeat, should the move happen Netflix would grant Apple more than 115 million streaming subscribers, or roughly half of the U.S. population. It would also fork over its library of award-winning original TV shows and movies. Netflix working toward producing more than 100 new films and TV shows this year alone.
Join us at SMWNYC from April 24-27, 2018 to explore these themes in depth with a high-profile roster of speakers from leading brands, platforms, and startups. Register today to claim your pass.