Looks like the rumors were true.
Apple announced today that it has agreed to acquire both Beats Electronics and Beats Music. The Cupertino firm will pay a total of $3 billion for the house that Iovine and Dre built, including $2.6 billion right away and another $400 million that will vest over time. As part of the deal, Beats co-founders Jimmy Iovine and Dr. Dre will join up with Apple.
As is usually the case with transactions like this, the Apple-Beats deal is subject to regulatory approval. Apple expects it to close in during its fiscal fourth quarter.
Speaking about the deal, Apple CEO Tim Cook said that music is an important part our lives is also very special to Apple. Cook went on to explain that Apple is snapping up Beats so that it can “continue to create the most innovative music products and services in the world.”
Only the execs from Apple and Beats know exactly what the future holds for the two companies, but there are a couple of possible reasons for the purchase. Apple could build upon the Beats Music streaming service to create an improved version that it could its own. As for the Beats Electronics name, Apple could take advantage of the “cool” factor of the Beats brand to gain some style points with consumers.
It’s worth noting that Tim Cook has confirmed that the Beats Music apps on both Android and Windows Phone will continue to exist after the deal closes. “It’s all about the music,” Cook told the Financial Times.