Update: Apple to Pay $3 Billion for Dr. Dre’s Beats Electronics after Further Review of the Company’s Streaming Service

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Update: via NBC

The deal is expected to close in the fiscal fourth quarter. Apple said it will pay $2.6 billion in cash and another $400 million that will vest over time.

Founded by rapper and producer Andre Young (aka Dr. Dre) and music mogul Jimmy Iovine, Beats Electronics is a key vendor in the premium headphone market. Apple reportedly began talks to buy the company in early May. Both Young and Iovine will join Apple as part of the deal.

“Iovine and Dre are kindred souls of Apple,” Apple CEO Tim Cook told CNBC in an interview.

Beats’ profit margins in the headphone market may be substantial. A pair of its high-end headphones retail for as much as $450, but production costs across the brand run only about $14 a pair, according to The New York Times. Apple said the deal would add to earnings in fiscal 2015.

 As I stated on other blog posts about Billboard’s anonymous sources (stating there was a snag in this deal because of the Tyrese/Dr. Dre premature viral video announcement), was pure bullshit. No way that video would affect a deal of this mangnitude and Billboard and its sources were reaching.

via NY Post

Apple’s biggest deal in its history just got a little cheaper.

The tech titan is expected to announce its acquisition of Beats Electronics this week — at the slightly reduced price of $3 billion, The Post has learned.

report in the Financial Times earlier this month tipping the deal put the price at $3.2 billion.

That may have been the case, but negotiations between Apple CEO Tim Cook and the company co-founded by Dr. Dre were not helped by a leaked report that had Beats Music with just 111,000 subscribers to its streaming service in March.

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