Straight Outta Cupertino: Apple to Buy Beats for $3B
May 29, 2014
Apple (NASDAQ: AAPL) has agreed to purchase Beats Electronics for $3 billion: $2.6 billion in cash and $400 million in equity. The deal includes Beats Music, the company's subscription-based music-streaming business. Apple will continue using the Beats brand, the first time the company has done so. This move is seen by some as a strategic move by Apple to cement its position in music streaming as well as regain some brand luster given its recent lack of revolutionary products. In addition, by adding celebrity Beats founders Jimmy Iovine and Andre Young (aka Dr. Dre), Apple could garner some pop-cultural cred.
Prior to Apple's announcement, Beats picked up a minority investment in late 2013 from The Carlyle Group, which is eyeing a $1 billion profit with the sale. Apart from streaming music, the company also makes audio software, headphones, earphones and speakers.