Dr. Dre sells Beats Electronics to Apple for $3 billion
In exchange for their company, which makes Beats by Dr. Dre headphones, the rap mogul and his business partner, Jimmy Iovine, are getting $2.6 billion in cash, $400 million in stock and big time jobs with Apple.
ADAM HUNGER/REUTERS As he'd announced three weeks ago, Dr. Dre is now the first billionaire in hip hop after selling his company — which makes the Beats headphones like the pair he's wearing — to Apple for $3 billion.
Dr. Dre is in the monay.
The rap mogul and his business partner, Jimmy Iovine, have inked a $3 billion deal to sell Beats Electronics, which makes the wildy popular Beats by Dr. Dre headphones, to Apple Inc.
Dre, 49, and Iovine, 61, are getting $2.6 billion in cash, $400 million in Apple stock, and big time jobs with the company.
Apple Seeks to Regain Cool With $3B Beats Buy
“We’ve known these guys forever,” said Apple honcho Tim Cook. “We’ve dated, we’ve gone steady and now we’re getting married.”
Cook called it an “incredible cultural fit.”
“These two guys have a very rare set of skills,” he said. “It’s like finding a particular grain of sand on the beach. It’s that rare.”
Business Wire Apple on Wednesday announced will buy the subscription streaming music service Beats Music as well as Beats Electronics, which makes the popular Beats headphones, speakers and audio software.
The Apple chief didn’t specify what exactly the good doctor and the legendary music producer would be doing for Apple, but he said the Beats’ music streaming service was the main selling point.
This will allow Apple, the world’s biggest seller of tunes, to compete in the lucrative Internet-based streaming business currently dominated by YouTube, Pandora and Spotify.
“Apple might just be paying a reasonable price for a fast-growing company,” said industry expert Brian Colello, an equity analyst at Morningstar. “They also bring in talented music executives and they might be able to do very interesting things with Beats.”
Another industry analyst, Tom Forte of the Telsey Advisory Group, said Apple was also likely to make a bundle on the headphones, which sell for up to $450 a pair and are already a big hit with the kids.
“The company has a history in music and an infrastructure with its retail stores and its websites to sell a lot of music accessories,” Forte told the Daily News.
This is the most expensive acquisition in Apple’s 38-year history. But it’s about $200 million less than what had been expected when word first leaked out three weeks ago that the iPhone maker was after Beats Electronics.
Michael Dwyer/AP A match made in music industry heaven: Beats headphones and an Mac laptop. The electronics will become siblings now that Beats Electronics has been sold to Apple.
Dre, a self-made success straight out of the gritty Los Angeles suburb of Compton who helped turn other rappers like Eminem and 50 Cent into stars, all but confirmed that he was on the verge of becoming the rap world’s first billionaire in a NSFW video that appeared of R&B singer Tyrese Gibson’s Facebook page.
"First billionaire in hip-hop, right here on the motherf-----g West Coast," Dre is heard saying.
In the video, they drink Heineken. Now they can afford to bathe in Cristal.