Apple set to acquire Beats for £1.9bn

Posted on 9 May 2014 by The Manufacturer

Computer giant Apple is reportedly in talks to buy headphone manufacturer Beats Electronic for a reported figure of $3.2bn (£1.9bn).

The Financial Times, who reported the news late Thursday evening, said negotiations are still ongoing for the Beats, which was founded by music producer Jimmy Iovine and hip-hop star Dr Dre in 2008.

It is believed an announcement for what would be Apple’s biggest ever acquisition could be made next week, as it looks to increase its presence in the phone and music accessories business.

Also benefiting from any deal would be phone company HTC, which acquired a 50.1% majority share in Beats for $309 million in 2011.

According to data from the NPD Group, a marketing research company, Beats controls 27% of the $1.8bn global headphone market — and 57% of the market for premium headphones valued above $99 or more.

The offer on the table from Apple is significantly higher than the $1bn value placed on Beats last September, after it received $500m of additional investment from the Carlyle Group.

Beats, which makes it product range in China, took manufacturing in-house in 2012 after ending its five year agreement with partner Monster and increasing its workforce to 300.