Apple buys Dr Dre's Beats for $3bn

Apple said it would buy headphone maker Beats Electronics, a headphone and music streaming specialist for about $3 billion on Wednesday, with Beats co-founders Jimmy Iovine and rapper Dr. Dre joining Apple as part of the acquisition.

It’s by far the most expensive acquisition in Apple’s 38-year history, a price that the company is hoping will counter a threat posed to its iTunes store.

Wednesday’s announcement comes nearly three weeks after deal negotiations were leaked to the media.

The price consists of $2.6 billion in cash and $400 million in Apple stock that will vest over an unspecified time period. The deal is expected to close before October.

With $1.1 billion in revenue last year, Beats is already making money and will boost Apple’s earnings once the new fiscal year begins in October, Apple CEO Tim Cook told AP.