$3.2bn Apple deal would make hip-hop mogul Dr Dre a BEEELLLIONAIRE
$3.2bn acquisition would be largest in Cupertino's history
Insiders claim that Apple is close to acquiring Beats Electronics, the headphones-and-streaming-music company founded by music mogul Jimmy Iovine and rapper Dr Dre, in what would be the largest purchase in Apple's history.
Previously, the most Cupertino ever shelled out to acquire another company was when it paid $404m to snap up NeXT in 1997 – that's $595m in today's dollars – which was the deal that brought fanboi icon Steve Jobs back into the Apple fold.
Apple wouldn't be the first tech company to lob some cash Beats' way. In 2011, Taiwanese smartphone maker HTC invested $309m for a 50 per cent stake in the company, and while it sold back half of its stake a year later, it remains Beats' largest single shareholder.
According to the FT report, Apple would be buying Beats' audio equipment business and its streaming music service, which launched in January. Both would be valuable assets.
Aside from flogging headphones, Beats makes a fair amount of coin licensing its audio enhancement technology to electronics vendors. HP offers a whole range of products that boast of onboard Beats Audio, as did HTC when it was cozier with the company. More recently, BeatsAudio speakers have appeared in some Chrysler cars.
It's not clear whether the BeatsAudio brand would become an Apple exclusive under the deal, but we certainly haven't seen many vendors advertising AuthenTec fingerprint sensors since Apple bought that company for $350m in 2012.
And then there's Beats Music, the streaming service currently headed by former Yahoo! Music chief Ian Rogers. It seems likely that Apple plans to merge it with its own iTunes Radio, which launched in 2013 but so far hasn't managed to win much market share away from industry leader Pandora.
Sources say the deal is far from done, and it could yet be scrapped if certain details can't be hammered out. But if it does go through at the reported price, Dr. Dre will have another reason to pop the Cristal; as recently as September 2013, Beats accepted a $500m investment from the Carlyle Group, placing its valuation at just over $1bn – a third of what Apple reportedly plans to pay. ®