TOKYO (Reuters) – Shares of Sony Corp rose nearly 3 percent on Tuesday as traders cited media reports speculating that the Japanese electronics maker could be a potential acquisition target of Apple Inc.
Although Steve Jobs once admired Sony, the company today contains nothing of value to Apple. A disruptor is unlikely to buy the company he just disrupted. Would Sony have bought Westinghouse? Would WalMart have bought Sears? Would Microsoft have bought IBM in the 1990’s?
When considering an acquisition the chances are that the asset being purchased is going to ask a premium price. So the buyer has to answer this question: what is it about the asset that makes it worth more than the market price?
There are three (and only three) sources of value that a buyer can buy:
- The resources (intellectual, physical, contracts, channels or employees)
- The processes (the algorithm of how those resources are put to use)
- The business model (the way the assets and processes and applied to create profits).
A company like Sony has some resources but its processes and business model are obsolete. Should Apple pay a premium for Sony’s assets? I don’t see a reason why.