Apple buys Beats for $3bn

Sale set to finalise in September
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Apple has purchased headphone firm Beats Electronics for $3 billion (£1.8bn) – its largest acquisition to date.

The sale will see the tech giant absorb Beats’ music streaming service, which works on a subscription-based model similar to services such as Spotify, and audio equipment firm, known for its eponymous over-ear headphones.

In addition, rapper and producer Dr Dre and music producer Jimmy Iovine, who co-founded Beats, will join Apple as part of the deal, which is expected to finalise in September.

“Music is such an important part of all of our lives and holds a special place within our hearts at Apple,” commented Apple CEO Tim Cook.

“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.”

Iovine added: “I’ve always known in my heart that Beats belonged with Apple.

“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.”

The $3 billion price tag paid by Apple makes the Beats acquisition its biggest-ever purchase to date. The previous largest figure was the $404 million (£242m) paid by the firm for tech company NeXT in 1996.

Reports of Apple proposing a Beats buyout first surfaced earlier in May, with the proposed bidding price of $3.2 billion slightly higher than the final $3 billion price paid.

The $3 billion sum will consist of a $2.6 billion purchase price plus an additional $400 million ‘vested over time’, according to Apple.

The deal was seemingly confirmed within days of the initial rumours, when a video of Dr Dre celebrating and proclaiming himself as ‘the world’s richest rapper’ was posted to the internet.

Dre posted an image (pictured) of an iPhone and a pair of Beats heaphones, overlaid with the text 'Here's to the next episode', following the official confirmation of the sale.

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