A deal that could see Apple buy Beat Electronics is reportedly in the final stages of negotiations. If the last details can be worked out, the deal could be announced as early as next week. According to The Financial Times, Apple would spend US3.2 billion to acquire the premium headphones and music streaming service company founded by music producer Jimmy Iovine and the hip-hop star Dr Dre.
The deal values Beats at a significant premium. The company was valued at about US$1 billion back in September when it landed a new US$500 million investment deal. That deal came just as the company finished buying back the last of HTC’s investment for US$265 million.
The report adds that the Beats management team would report directly to Apple CEO Tim Cook if and when the deal closes.
The acquisition would allow Apple to grow its accessories business with new lines of headphones and other audio technologies. Perhaps more importantly as music consumption increasingly shifts to subscription services as Beats Music, Pandora and Google Play Music All Access (which launched in Canada this week), it could allow Apple to enhance its iTunes music service with new subscription service options.
The US$3.2 billion acquisition would be Apple’s largest acquisition ever. Despite buying 24 companies in the past 18 months, none have come close to the value of this deal. It could signal a new direction for Apple which has been reluctant to engage in large acquisitions in the past. With more than US$100 billion in cash, the move could be a sign that Apple is about to go on a bit of a shopping spree, something that Cook himself hinted at as recently as last month.
Source : The Financial Times