Tech giant Apple will acquire music service Beats Music and Beats Electronics for $3 billion, a move aimed at strengthening its music services portfolio.
The deal, expected to close in the fourth quarter, will see Beats co-founders Jimmy Iovine and Dr. Dre joining Apple.
Speculations about the deal started earlier this month with the size estimated at $3.2 billion.
“Apple is acquiring the two companies for a total of $3 billion, consisting of a purchase price of approximately $2.6 billion and approximately $400 million that will vest over time,” Apple said in a statement.
Formally established in 2008 by artist and producer Dr. Dre and Chairman of Interscope Geffen A&M Records Jimmy Iovine, Beats Electronics (Beats) comprises the Beats by Dr. Dre family of premium consumer headphones, earphones and speakers.
It also includes patented Beats Audio software technology and streaming music subscription service Beats Music.
“Music is such an important part of all of our lives and holds a special place within our hearts at Apple. That’s why we have kept investing in music and are bringing together these extraordinary teams,” Apple CEO Tim Cook said.
He added that this will help Apple to continue to create the most innovative music products and services in the world.
Iovine has been an instrumental partner for Apple and iTunes for more than a decade.
With the acquisition, the Beats product line-up will be offered in many more countries through the Apple Online Store, Apple’s retail stores and select Apple Authorised Resellers.
“Music is such an important part of Apple’s DNA and always will be. The addition of Beats will make our music line-up 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,” Apple senior vice president of Internet Software and Services Eddy Cue said.
In five years since its launch, the Beats “b” has become the brand of choice in the music and sports worlds with stars such as Lady Gaga, Lil Wayne and Nicki Minaj having designed their own customised Beats headphones and speakers.
