Apple has officially announced plans to acquire popular headphones maker and subscription streaming music service – Beats Music and Electronics in a deal worth $3 Billion. The deal itself is worth $2.6 million in cash and $400 million in shares as opposed to the initial $3.2 Billion speculated by various sources.
The deal enters the book as Apple’s biggest acquisition in history and also marks the first major move by current CEO Tim Cook. Both Beats founders Dr. Dre and Jimmy Iovine would join Apple’s team and work under iTunes chief Eddy Cue. The Beats Music section would be run by Eddy Cue while the Electronics division would be headed by Philly Schiller.
In a break down of the deal by Wall Street Journal, Apple is paying $2.5 Billion for the Beats Electronics (Headphones and speaker division) and $500 Million for Beats Music streaming service. The figure of the Beats Music streaming service could be attributed to the fact that it currently has only about 250,000 subscribers in the US compared to the 10 millions worldwide subscribers commanded by Pandora.
The deal is still subject to regulatory approval and is expected to be completed by the fourth financial quarter of this year (Q4 2014).
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