Beats co-founders Jimmy Iovine and Dr. Dre are now Apple guys
After remaining eerily quiet for weeks following rumors and speculation of a $3.2 billion takeover, Apple this week finally announced that it has agreed to acquire Beats Music and Beats Electronics for $3 billion, $200 million shy of the originally reported figure. That includes a $2.6 billion purchase price and around $400 million that will vest over time. In addition, Beats co-founders Jimmy Iovine and Dr. Dre will join Apple as part of the deal.
As previously surmised, it appears that the streaming music service Beats Music was the motivating factor in getting this deal done, hence Apple making mention of it first in its press release and treating the service as a second company.
"Music is such an important part of Apple’s DNA and always will be," said Eddy Cue, Apple’s senior vice president of Internet Software and Services. "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."
Before the deal became official, there was speculation in the media that it might not come to fruition, due in part because Apple was angered by a video posted online featuring Dr. Dre and Tyrese Gibson bragging about the unannounced deal. However, it seems more likely that the deal took longer than expected to complete as the two sides negotiated a final buying price.
This is Apple's most expensive acquisition to date; all eyes will be on CEO Tim Cook to see if it was the right one.
"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."