It took a bit longer than expected but Apple today announced that it will acquire both Beats Music, the recently launched music streaming service, and Beats Electronics, makers of music accessories such as the well-known Beats headphones and speakers. The deal is worth US$3 billion, US$2.6 billion in cash and US$400 million in stock that will vest over an unspecified period of time. Despite the deal coming in about US$200 million less than initially expected, it is still Apple’s biggest acquisition to date.
“Music is such an important part of all of our lives and holds a special place within our hearts at Apple,” said Tim Cook, Apple’s CEO. “That’s why we have kept investing in music and are bringing together these extraordinary teams so we can continue to create the most innovative music products and services in the world.”
Both Beats co-founders Jimmy Iovine and Dr. Dre will join Apple in yet to be specified roles.
It remains to be seen what Apple will do with Beats Music and Beats Electronics. It may well be that the former will be rolled up into iTunes to give Apple its own music subscription service while it remains to be seen what Apple will do with the accessories side of the business. With Beats being a well-established brand, it’s not as clear how Apple might proceed. One possibility is that Beats’ technology will make its way into Apple’s devices once HP’s deal with the company runs out.
The acquisition is expected to close by the end of the year once regulatory approvals have been obtained.
Source : Apple