Apple to pay $4b for headphone maker Beats
APPLE agreed to buy Beats Electronics for US$3 billion (S$3.8 billion), its biggest acquisition, nabbing a popular line of headphones and a nascent subscription music-streaming service as the iPhone maker seeks to rev up growth.
Beats founders Dr. Dre and music-industry executive Jimmy Iovine will join Apple, the companies said in a statement on Wednesday.
The purchase price is US$2.6 billion, with US$400 million more that will vest over time. The acquisition is projected to close in the quarter that ends in September.
The deal signifies that Apple chief executive officer Tim Cook is willing to use the company's US$150.6 billion in cash more aggressively, a departure from predecessor Steve Jobs' playbook of acquiring smaller companies to bring in technology and talent.
As sales of digital music downloads fall, buying Beats gives Apple a foothold in Internet-based streaming, where Google's YouTube, Spotify and Pandora Media dominate.
"Music is such an important part of all of our lives and holds a special place within our hearts at Apple," Mr Cook said in the 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..."
The deal indicates how the CEO, who is facing pressure to jump-start Apple's revenue amid cooling iPhone and iPad sales, is changing tack to acquire growth.