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Apple Close to Acquiring Beats Electronics for $3.2 Billion

Apple Close to Acquiring Beats Electronics for $3.2 Billion

Apple is reportedly close to acquiring headphone company Beats Electronics. The company, which recently also started offering a streaming music service, was created by Jimmy Iovine, and Dr. Dre.

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The Financial Times says the deal could be announced as soon as next week:

Apple will acquire Beats’ streaming music service, which launched this year, and its audio equipment business, which includes its brand of headphones and audio equipment. The Beats management team will report to Mr Cook, said people familiar with the deal. Apple and Beats declined to comment.

Apple will reportedly pay $3.2 billion for the company. At last report, Apple has around $150 billion in cash on hand, so a Beat acquisitions would barely make a dent in that war chest.

In addition to a large range of popular headphones and speakers, Beats also recently launched its own Beats Music streaming service to compete with Pandora, Spotify, and Apple’s own iTunes Radio. Beats Music is available to subscribers for $9.99 per month.

Apple has been rumored to be working on a complete overhaul of iTunes, and part of that redesign was said to include an on-demand music streaming service. It’s possible that buying Beats for their music service may have been more attractive to Apple than doing ground up build of their own service.

Apple and Beats Electronics have had a long relationship, as January 2013 saw Beats CEO Jimmy Iovine meeting with Apple executives about a possible partnership. Iovine has also been quoted as saying that he pitched a streaming music service to Steve Jobs 10 years ago, but Jobs passed on the offer.

The Financial Times says details are still being ironed out, saying “talks could still fall apart.” 

MacRumors reports that BloombergThe Wall Street Journal, and The New York Times have confirmed that Apple is in talks with Beats Electronics over a possible acquisition. 

Also, a (NSFW) video posted to Facebook by actor Tyrese Gibson showed Beats Electronics founder and musician Dr. Dre seemingly confirming the acquisition, however that video has been pulled from Facebook. It is still available for view, as it has since been reuploaded to YouTube by another source.

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