Apple’s boss Tim Cook said on a recent earnings call with investors and analysts that his company on average acquired between fifteen to twenty smaller companies per year for the last four years, noting that Apple looks for startups of all sizes. “There’s not a size that we wouldn’t do based on just the size of it, it’s more about the strategic value of it,” he said.

A new report Wednesday from Bloomberg alleges that Apple’s reluctance to cooperate with third-party advisers like investment banks, risk aversion and internal acquisition strategy are standing in the way of large takeovers.

Apple is said to be inexperienced in closing and integrating large takeovers. Its lack of a successful track record integrating big acquisitions puts off sellers, said sources who have worked on acquisitions with the company.

When AT&T agreed to buy Time Warner for $85 billion in October 2016, for instance, Apple was reportedly unable to pull together a competing proposal quickly enough. Apple’s deals team is apparently composed of about a dozen people under former Goldman Sachs banker Adrian Perica.

Rather than cooperate with investment bankers appointed by the seller, Apple’s acquisition team prefers working directly with company management. They are said to “dictate” terms and tell targets “to take it or leave it.”

“There’s a swagger—you may call it arrogance—about the culture there,” said Eric Risley, managing partner at Architect Partners. “They’re used to being able to muscle their way in and get attractive economics.”

Apple’s largest deal to date is the $3+ billion purchase of Beats.

Some analysts think Apple needs at least one big acquisition in online video to meet the self-imposed goal of growing its annual services revenue to $50 billion by 2021.

Some of the potentially blockbuster acquisition targets for Apple would include Walt Disney and electric carmaker Tesla, analysts opined. “They’re going to have to pursue something bigger than a Beats-like acquisition,” said Erick Maronak, chief investment officer at Victory Capital Management.

When Morgan Stanley’s Katie Huberty wanted to know if Apple’s leadership was open to larger mergers and acquisitions, Cook responded by saying cryptically, as he always does, that Apple is always looking at acquisitions. Any large takeover would need to come in the form of the Netflix or Time Warner acquisition, presumably.

Apple has $246 billion in cash holdings so clearly they have the financial clout to snap up pretty much any corporation out there. The question is, should it? While there may be clear benefits to buying, say, Netflix or Time Warner, what might happen after any such deal in terms of potential corporate culture clash is an entirely different matter.

While we know from Cook’s remarks that Apple continues to acquire smaller companies at a clip of 15-20 startups every year, I’m more interested in learning about other acquisitions they potentially made but didn’t disclose.

As you know, the Cupertino company has a penchant for confirming acquisitions with its usual boilerplate statement, but only after the media discover such deals.

Source: Bloomberg

  • 5723alex .

    All investment bankers want is their cut of $$$ for negotiating acquisitions.

  • Jurassic

    Bloomberg would like to see Apple make large acquisitions like Microsoft’s purchase of Nokia for $7.2 billion (Microsoft later sold Nokia for only $350 million), or Google’s purchase of Motorola for $12.5B (Google later sold Motorola for only $2.9B)?

    You can definitely classify Microsoft’s and Google’s large acquisitions as “arrogance”, but Apple’s highly profitable acquisition choices have been intelligent.

    Bloomberg obviously does not know what it is talking about, and Apple has been very wise to ignore bad advice from “analysts” like this.

  • Toukale

    This story falls in the “Fake News” category as far as I am concern.

    • Forgive me for being confused, but I always assumed that fake news was well… news that was fake. What is your definition? Any journal article that doesn’t meet your personal criteria of “interesting”?

      I didn’t notice any misrepresentation of facts, erroneous quotes, or half truths here. Did I miss something?

  • Siri Tim Cook Holness

    Y is Samsung on the chart when it isn’t American and it says American peers

    • Vander Tramp

      cause Samsung is a big company and hence worth the mention?

      • Siri Tim Cook Holness

        Still it shouldn’t mention Samsung and say American peers it should just say peers

  • Shinonuke

    We saw what happen when big acquisition was made to bailout Motorola. Ended up losing money and had to sell it to someone else. I think smart/strategic acquisitions are better than making huge ones.

  • Jay

    Apparently people don’t think that is necessary anymore. Sad.

    • Toukale

      Are you kidding me? This story is all about investment bankers complaining that Apple should hire them to make more large acquisitions. There are no facts but a bunch of assumptions coming from folks who have vested interest in getting paid by Apple as a middle man/woman.

      There are not one company listed as proof that Apple tried to buy such and such big company but failed. If anything your guys are the gullible ones. I don’t know how many times Apple needs to say this, they won’t make large acquisitions for acquisitions sake. Besides the percentage of successful large acquisitions are terrible.

      People just love to spend other peoples’s money. Apple did not get where they are or as big by manufacturing through big acquisitions. They grew organically, if any of you can list one fact which is not someone’s opinion in that story that have a hidden agenda then I am willing to take it back. I will be waiting.

      • Jay

        So.

      • Toukale

        I explained my position why I thought this story was manufactured (fake news). A story with no facts to back it up is called an “opinion piece.” Which is what this is, I would have no problem if this article was presented as such, but the author instead tried to sell it to us as facts when none was provided.

      • Jay

        Sorry, thanks. I appreciate it.

      • Toukale

        I appreciate the feedback, thank.