After several reports, Apple officially announced that it would acquire Beats Music and Beats Electronics for a total of $3 billion ($2.6 billion in cash and $400 million in stock). Under the terms of the deal, the co-founders of Beats Audio Jimmy Iovine and Dr. Dre will join Apple’s executive ranks. This marks the largest acquisition ever made by Apple. The acquisition is subject to regulatory approvals and is expected to close in Q4 this year.
The CEO of Apple, Tim Cook, in a letter to Apple’s employees regarding the deal, said, ”Both Apple and Beats believe that a great music service requires a strong editorial and curation team, and we will continue to expand what we do in those areas. The addition of Beats will make our incredible iTunes lineup even better, extending the emotional connection our customers have with music.”
Sharing a laugh with Jimmy, Dre, and @cue. Excited to welcome the #Beats team to #Apple. It’s all about the music. pic.twitter.com/ZwyWgHFwhO
— Tim Cook (@tim_cook) May 28, 2014
In an interview here at Apple’s headquarters, Timothy D. Cook, Apple’s chief executive, repeatedly emphasized the talent that Dr. Dre and Iovine would bring to Apple. He also praised the Beats music service, which creates playlists for subscribers.
“These guys are really unique,” Cook said. “It’s like finding the precise grain of sand on the beach. They’re rare and very hard to find.”
Beats Electronics sells audio products and also offers Beats Music, a subscription-based service. The Cupertino giant says that both the Beats hardware brand as well as the Beats Music streaming service will remain separate. Beats audio accessories such as headphones and portable speakers are already available through Apple’s retail stores. Apple said iTunes, which sells individual songs and albums and offers a streaming radio service, would be offered alongside the Beats music service. Apple did not reveal any details about the products it plans to develop with Beats in future.
Jimmy Iovine, the Beats co-founder and one of the most respected figures in the music industry had the following to say:
“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.”
Quite expectantly, both parties expressed their satisfaction with the deal. Tim Cook even tweeted a photo sharing a laugh with the new members of the company’s executive team. Both Beats Audio and Beats Music will keep operating on their after the acquisition. However, Apple’s top executives Eddy Cue and Phil Schiller will run the duo of businesses.
