Apple officially confirmed that it has agreed to acquire Beats Music and Electronics services for $3 billion, its largest acquisition ever.
Just a day after the New York Post speculated that the Apple-Beats deal will be announced sometime this week, the Cupertino tech giant officially confirmed the acquisition for $3 billion. Though it doesn't come as a complete surprise, thanks to the rumors that surfaced as early as this month, it is always good to hear two great companies like Apple and Beats joining forces for the next big thing.
As a part of the deal, Apple will pay $3 billion for Beats Music streaming service and Beats Electronics, which makes the critically acclaimed headphones, speakers and audio software. Apple will pay $2.6 billion initially and another $400 million over time.
"Music is such an important part of all of our lives and holds a special place within our hearts at Apple," Apple CEO Tim Cook said in a press release, Wednesday. "That's why we have kept investing in music and are bringing together these extraordinary teams so we can continue to create the most innovative music products and services in the world."
The excitement is mutual, as Jimmy Iovine, who is the co-founder of Beats, echoed Cook's thoughts about the new partnership. "I've always known in my heart that Beats belonged with Apple," Iovine said. "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."
The company's co-founders Iovine and Dr. Dre will join the Cupertino team full time. In an interview with Re/Code, the newly joined members of Apple said they had no plans of settling in L.A. but preferred flying to Cupertino on a regular basis.
Beats was originally valued at $3.2 billion, but Monday's report lowered the price to $3 billion. Though the music streaming company made millions with the deal, Dre will not be joining the billionaire club as of now, according to the calculations made by The Post.
As far as the future plans for the new partnership go, Dre, Iovine and Cook decided to stay mum on the subject. "See, in the record business, you can show someone your song, and they don't copy it. In the tech business, you show somebody your idea, and they steal it," Iovine told Re/Code during the interview.
