Apple Inc. (NASDAQ:AAPL) may be acquiring Beats Electronics for $3.2 billion, according to the Financial Times. This would be Apple’s largest acquisition in history if it is true. The deal could completely fall apart though. As part of the deal, Apple would take control of the Beats hardware business and its new music streaming business, Beats Music.
The deal does not sound farfetched because Apple has billions of dollars in cash and cash equivalents that it is sitting on. Beats co-founder Jimmy Iovine once tried to convince Apple co-founder Steve Jobs to launch an Apple music service and Beats almost partnered with Apple last year.
Iovine co-founder Beats with producer and rapper Dr. Dre seven years ago. Iovine and Dr. Dre came up with the idea of starting a high quality headphone company because the two of them were not impressed by the sound quality of headphones that came with the original iPod devices.
HTC used to own half of Beats. HTC acquired half the company in 2011 for $300 million. Beats Audio was integrated into HTC smartphones shortly after that. Beats ended up buying back HTC’s shares in the company last year and reportedly raised $500 million in funding from The Carlyle Group.