Apple is in talks to purchase streaming music and premium headphone giant Beats Electronics for a reported $3.2 billion, in what could potentially become the company's largest acquisition ever. The news also a noticeable change in behavior for Apple, as the electronics giant has thus far avoided treading too heavily in the world of mergers and acquisitions. The deal, if completed, would see Apple acquiring the company and its current 27% share of the headphones market as the largest brand in the market. According to a recent writeup from bizjournals.com, Apple is in position to take the helm of the music technology market while Beats and company founders Dr. Dre and Jimmy Iovine also stand to benefit greatly if all goes according to plan:
The deal would represent a huge premium for Beats, which took a $500M investment from the private equity firm Carlyle Group in September that put its valuation at about $1 billion. It would also be a major boon for Dr. Dre, whose ownership stake in the company would reportedly make him the first rapper to become a billionaire, catapulting him past current No. 1, Sean "Puffy" Combes, who has a net worth of about $700 million.The deal, while perhaps not transformative for Apple, cements the company as the premier technology firm for music, a title that it claimed in the early 2000s with the advent of the iPod and iTunes and which has been challenged recently by brands like Beats in hardware and streaming services like Pandora and Spotify in software.
Read the full breakdown on the potential merger via The Financial Times. Stay tuned for more as details emerge.
