Apple Inc. (NASDAQ:AAPL) has announced today that it will buy Beats Electronics for $3 billion. The news of the deal broke around 3 weeks ago, but it was delayed. The original price was expected to be $3.2 billion, but it was brought down.
Beats co-founders Jimmy Iovine and Dr. Dre will be joining Apple. It is unknown what their responsibilities be. However, we know that their titles will be “Jimmy and Dre.”
This deal will be $2.6 billion up front and another $400 million over time. This is now Apple’s largest acquisition ever. This deal is expected to close by the end of the year.
Apple will continue to sell Beats products under the Beats brand name. Beats also runs a streaming music service to Spotify called Beats Music. Beats Music stands apart from other services by creating a recommendation engine that can curate playlists based on what you are doing.
Beats Music CEO Ian Rogers will be reporting to Apple VP Eddy Cue, who is known for running iTunes. Iovine will work at Apple full time. Dr. Dre said that he will be producing music, but will work at Apple whenever he is needed there.
“We think these guys have a very rare talent. We love the subscription service that they built. We think it’s the first one that really got it right,” stated Apple CEO Tim Cook in an interview with The WSJ.