Apple is set to buy Dr Dre‘s Beats Music streaming service and headphones company Beats Electronics for $3 billion.
Beats co-founders Dr Dre and Jimmy Iovine will join Apple as part of the deal. Iovine will leave Interscope, the label he co-founded, to work with Apple. “I’ve always known in my heart that Beats belonged with Apple,” he commented. “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.”
Apple will pay $2.6 billion for the two businesses in addition to approximately $400 million “that will vest over time” they say in a press release. Announcing the deal, Apple’s CEO Tim Cook stated: “Music is such an important part of all of our lives and holds a special place within our hearts at Apple. 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.”
Apple’s senior vice president of Internet Software and Services Eddy Cue added: ‘The addition of Beats will make our music lineup even better, from free streaming with iTunes Radio to a world-class subscription service in Beats, and of course buying music from the iTunes Store as customers have loved to do for years.” Beats Electronics was founded in 2006 and put out its first headphones in 2008. Dr Dre’s involvement with the company has made him the richest artist in hip hop. Beats made $1.2 billion last year, earning him $200 million and leaving him with a total of $550 million.