We reported earlier that Apple was considering the acquisition of Beats for a whopping $3.2 billion. In what is the company’s largest ever acquisition, Apple has formally confirmed that the deal is in works, pegging the number at $3 billion.
Apple and Beats have a long-standing relationship and in the past, the two have partnered to sell Beats flagship headsets. Apple executives, including Tim Cook, consider Beats co-founders Jimmy Iovine and Dr. Dre as music visionaries. Which is why both will join Apple as a result of the acquisition.
Of the $3 billion that Beats co-founders will be paid for their company, $2.6 billion will be handed over in cash, while another $400 million will be offered in stock. In an unusual praise from Tim Cook, he said, “They’re going to be coming up with ways of features that blow your mind. And products you haven’t thought of yet, and seeing around the next corner to articulate the way to take music to an even higher level than it is now.”
Cook is hopeful that the Beats team will help Apple maintain its undisputed dominance of the digital music market. The statement from Iovine talks about Apple’s central role in the music industry. According to him, “I’ve always known in my heart that Beats belonged with Apple. The idea when we started the company was inspired by Apple’s unmatched ability to marry culture and technology. Apple’s deep commitment to music fans, artists, songwriters and the music industry is something special.”
It will take another few months before the deal is finalized by the two companies and approved by the regulatory authorities. Apple will inherit the popular consumer headphones lineup of Beats as well as its music service.