Apple buys Beats Electronics for US$3bn
- 29 May, 2014 08:57
Apple has acquired headphones maker Beats Electronics for US$3 billion, in what is the company's largest-ever acquisition.
Beats makes a popular line of headphones and recently launched a streaming music service. The company was founded by music producer Jimmy Iovine and hip-hop artist Dr. Dre. As part of the acquisition, Iovine and Dr. Dre will join Apple.
The total value of the acquisition is US$3 billion, consisting of a purchase price of approximately $2.6 billion and approximately $400 million that will vest over time. The deal is expected to close in fiscal Q4, subject to regulatory approval.
The deal marks a major new content and hardware push for CEO Tim Cook. Apple was known to be wary of big acquisitions under his predecessor, the late Steve Jobs.
“Music is such an important part of all of our lives and holds a special place within our hearts at Apple,” said Cook in a statemement. “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.”
Eddy Cue, Apple’s senior vice-president of Internet Software and Services, added music would continued to be a core part of Apple's future.
“The addition of Beats will make our music lineup even better, from free streaming with iTunes Radio to a world-class subscription service in Beats, and of course buying music from the iTunes Store as customers have loved to do for years," he stated.