Apple set to buy Dr Dre’s Beats for R33bn

2014-05-09 11:20

Apple is close to buying headphone maker Beats Electronics for $3.2bn (R33bn).

The purchase of Beats, which also runs a streaming music service, would be Apple’s largest ever acquisition, the Financial Times reported. It said the deal could be announced as early as next week.

Founded by rapper Dr Dre and music producer Jimmy Iovine, Beats Electronics primarily produces products under the brand Beats by Dr Dre and competes with Skullcandy, Sennheiser and Bose.

“This is really puzzling,” said Forrester analyst James McQuivey. “You buy companies today to get technologies that noone else has or customers that noone has.”

“They must have something hidden under the hood.”

Apple-watchers have speculated that the company that upended the music industry – and today is the single largest seller of tunes – was contemplating a Spotify-like on-demand music service to go with its recently launched iRadio service and iTunes store.

Apple chief executive Tim Cook met with Iovine, his Beats counterpart, last year to discuss a potential partnership involving Beats’ planned music-streaming service, Reuters reported in March, citing sources.

Dre – who guided the careers of a string of rap artists including Eminem and 50 Cent – compared his company with Apple in 2011.

“We’re trying to eventually be second to Apple. And I don’t think that’s a bad position,” Dre told The FADER music website.

Apple and Beats Electronics were not immediately available for comment on the report, which was also carried in the New York Times and Wall Street Journal.

Beats Electronics received a $500m investment from The Carlyle Group in September that valued the company at over $1bn.

Beats also bought back a 24.84% stake held by Taiwan smartphone maker HTC in September.

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