About 10 years ago, I came up with a rule for covering mergers and acquisitions that has proven to be consistently accurate.

Here it is: Will Apple buy [insert company of your choice here]? –> No.

Apple rarely acquires well-known companies. Its largest takeover to date was the $3 billion deal for Beats Electronics in 2014. Apple is very selective about its culture and focus. In contrast, Microsoft has grown through acquisitions, purchasing companies like Activision Blizzard for $69 billion, LinkedIn for $26 billion, and Nuance Communications for $20 billion, among others. Mergers and acquisitions are simply not in Apple’s DNA.

There has been speculation for years that Apple might be interested in buying Disney, a company valued at nearly $150 billion. The connection between the two companies is strong, particularly since Apple co-founder Steve Jobs became Disney’s largest individual shareholder after Disney acquired Pixar, which was owned by Jobs, for $7.4 billion in 2006. However, Apple’s market capitalization is now close to $3 trillion, so acquiring Disney wouldn’t even be a significant transaction for the company.

In his autobiography, “The Ride of a Lifetime” (2019), Disney CEO Bob Iger expressed his belief that Disney and Apple might have merged if Jobs had lived longer. Iger has kept the connection between Disney and Jobs alive, even distributing a book by Jobs to Disney employees.

Selling Disney to Apple could be a perfect ending for Iger, who could argue that joining forces with the most successful technology company in history is the best way to transition Disney into a modern media company. The family-friendly brand of Disney aligns well with Apple’s appeal to global consumers.

However, it is unclear whether Apple would have any interest in acquiring Disney. Besides having a strict policy against mergers and acquisitions, Apple lacks expertise in running theme parks or selling the types of consumer products that Disney offers. Additionally, Apple has shown little interest in the cable television industry, which is currently in decline.

While Apple has explored ventures in owning sports rights and creating original content for Apple TV+, these businesses are relatively small compared to its core focus on devices. Apple has not disclosed the number of Apple TV+ subscribers to investors.

On one hand, acquiring Disney could boost Apple’s fledgling businesses, helping with device churn and growing subscription revenue. On the other hand, spending over $100 billion on an acquisition involving ESPN, a business with declining subscribers, and a content business that currently operates at a loss may not be Apple’s preferred choice.

Apple might consider acquiring Disney to enhance its augmented reality headset division, which could be its next major growth area. However, this alone may not provide a strong enough reason for an acquisition.

Even if Apple’s CEO Tim Cook were enamored with the idea of owning Disney and its associated perks, such as free Disney World rides for Apple employees and content synergies for device owners, it is uncertain whether regulators would approve such a deal. With Lina Khan leading the Federal Trade Commission’s efforts to scrutinize big tech acquisitions, the chances of the U.S. government allowing Apple to further expand its dominance in the global economy are slim.

Suppose Apple and Disney were to pursue legal action to obtain approval, given their limited overlap in business operations. In that case, the process would be time-consuming and messy, introducing unnecessary uncertainty for both companies.

For the sake of argument, let’s assume that Apple does want to acquire Disney. Let’s also assume that Disney divests or sells its legacy cable assets, eliminating businesses with no growth potential that could weigh on Apple’s earnings. Even if the regulatory environment becomes more favorable, a merger would require blending Disney’s corporate culture with Apple’s. The experience with Disney’s recent leadership change under Bob Chapek highlighted the strength of Disney’s existing culture and the challenges of shifting employee attitudes and expectations, even for someone with three decades of experience at the company. Merging two well-established and distinct cultures could potentially be a recipe for disaster.

The overwhelming evidence from past large media mergers, such as AOL buying Time Warner, AT&T buying Time Warner, CBS and Viacom merging, and Discovery and WarnerMedia merging, shows significant value destruction.

So, could Apple eventually acquire Disney? It is possible. However, I am in no hurry to revise my cardinal rule on mergers and acquisitions.