Apple has officially acquired Beats for $3 billion.
Apple has officially confirmed its acquisition of Beats today. However, contrary to earlier reports, Apple is paying a total of $3 billion for Beats Music, the company's subscription streaming music service and Beats Electronics, the maker of the popular headphones.
Don't Miss: Victoria's Secret Fashion Show 2016
According to Apple's press release, the deal will consist of a purchase price of $2.6 billion and roughly $400 million that it plans to "vest over time."
The deal is expected to close in the fourth quarter of Apple's fiscal calendar.
Unsurprisingly, Apple also confirmed that Beats co-founders Jimmy Iovine and Dr. Dre will be joining Apple. In an interview with Re/code today, Apple CEO Tim Cook said that Iovine and Dr. Dre will be working full-time at Apple.
Apple's press release also revealed why it is buying Beats.
Somehow the opening line of the press release mentions Beats Music first before Beats Electronics. Indirectly-speaking, Apple is hinting that it is buying Beats for its music streaming service.
“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,” Tim Cook said.
Jimmy Iovine was also quoted in the press release as saying, “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.”
Furthermore, Eddy Cue, Apple’s SVP of Internet Software and Services, added, “Music is such an important part of Apple’s DNA and always will be. 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.”
Although Beats Electronics is a highly-profitable business, Apple is clearly interested in Beats' steaming service, which will provide an excellent head start in the great war of music streaming services.