Earlier this week we were wondering if the Beats by Apple deal would really get done, and if so, what were the hold ups. After all it was back on May 8th that the humongous deal for Apple to acquire beats for $3.2 billion dollars was initially leaked. With those leaks came a promise that the deal would be announced the following week.
Nearly three weeks later the deal has been officially announced, and it’s projected to close as early as this September.
Apple announced that they would be buying Beats By Dre including the Beats Music streaming service for $3 billion dollars, just $200 million dollars less than originally reported. Sure that $200 is a lot of freaking money to most people but going from $3.2 billion to just $3 billion seems minuscule in the grand scheme of things.
The deal calls for an initial payment of $2.6 billion with another $400 million vesting over time. This is Apple’s largest acquisition in the company’s history. Prior to this deal the deal that brought Steve Jobs back to Apple, the acquisition of NeXT computers in 1996 was valued at $404 million.
As originally reported both founders of Beats, record mogul Jimmy Iovine and hip hop mogul Dr. Dre will both be employees of Apple, a fact confirmed during re/code’s Code Conference on Wednesday. Iovine will switch to a fulltime role at Apple. He admitted at the Code Conference that he has no day job as of right now. Dr. Dre will continue producing music and work at Apple as needed.
“Music is such an important part of all of our lives and holds a special place within our hearts at Apple,” said Tim Cook, Apple’s CEO in a statement. “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.”
“I’ve always known in my heart that Beats belonged with Apple,” said Jimmy Iovine. “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.”