Tech company announces acquisition of Dr. Dre and Jimmy Iovine’s growing audio empire.
Apple has confirmed its acquisition of Beats by Dre, the Associated Press reports. On Wednesday (May 28), the company announced that it will pay $3 billion for Dr. Dre’s and Jimmy Iovine’s sound superpower, a move which could deepen its presence in the music streaming world.
The tech giant is expected to shell out $2.6 billion in cash and $400 million in stock for Beats, marking Apple’s largest purchase in its nearly 40-year history. The sale will be final in late September.
In addition to the Beats takeover, Dre and Iovine will accept yet-to-be-determined executive positions with Apple’s music division.
The music execs are more than qualified to help Apple grow its streaming imprint against competitors like Spotify and Pandora, and strengthen its appeal among young consumers. “I’ve always known in my heart that Beats belonged with Apple,” Iovine said in a statement. “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.”
Besides raking in $1.1 billion last year, Beats accounts for more than 50 percent of U.S. headphones sales priced over $100. Also on the rise is streaming service Beats Music, which has more than 250,000 subscribers and growing according to Apple CEO Tim Cook.
Cook has been watching Dre and Iovine expand in music, and now technology, over the years. “We have known these guys forever,” he said. “We’ve dated, we’ve gone steady and now we are getting married. This relationship started a decade ago, so we know there is an incredible cultural fit. These two guys have a very rare set of skills. It’s like finding a particular grain of sand on the beach. It’s that rare.”
Bringing Beats into the Apple fold will still allow both companies to maintain brand identity. However, Apple will now offer the Beats streaming service, speakers and headphones, along with iTunes and iTunes radio.
Apple and Beats have not yet revealed any upcoming collaborative products.
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