Apple (NASDAQ: AAPL) has acquired Beats Electronics, the headphone maker and music streaming service, for $3 billion.
The acquisition brings Beats' popular line of headphones and subscription-based music streaming service to an Apple lineup that already includes iTunes, the world's top music retailer. In 2013, Beats captured 64 percent of the headphone market and was worth $1 billion last year, according to TechCrunch. The company dominates the category with younger buyers and displays at thousands of retail locations including mass and electronics chains.
Under the deal, Apple gains control of Beats' audio hardware division and streaming service. Beats' co-founders, rap star Dr. Dre and music mogul Jimmy Iovine, will join Apple reporting to CEO Tim Cook. Apple will continue to market the Beats products under the Beats brand name.
The $3 billion deal is the largest purchase in Apple's 38-year history. Apple has made 24 acquisitions over the past 18 months. During Apple's recent quarterly earnings call in April, Cook said the company was "on the prowl" for potential acquisitions that would further enhance existing and future product lineups.
Rumors of the merger surfaced on May 9, but sources cautioned that final details were still being determined and negotiations could have ultimately dissolved.
-See this Apple press release
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