Apple Inc. (NASDAQ:AAPL) was reported to be interested in buying Beats Electronics, the company owned by hip hop artist Dr. Dre, in a deal worth $3.2 billion. Media reports have suggested that the deal could be announced as early as next week. Now it seems as if Dr. Dre himself has confirmed that Apple does want to buy his company, and Reuters said it has independently verified that the story is true.
Dr. Dre appears to confirm Apple acquisition
In a video riddled with swear words, Dr. Dre appears in a music studio with Grammy-nominated R&B singer Tyrese Gibson. Gibson states that he’s extremely drunk, and indeed, his slurred speech would suggest he’s right. Dr. Dre is behind Gibson in the video and says he’s the “first billionaire in hip hop.”
Gibson posted that video on his Facebook page. Dr. Dre doesn’t specifically mention Apple Inc. (NASDAQ:AAPL), although Gibson said something about $3.2 billion in his post. The video has since been removed from Facebook, but we were able to locate it on YouTube. If you choose to watch this video, beware the explicit language.
Is Dr. Dre’s video real?
Perhaps Apple Inc. (NASDAQ:AAPL) ordered it to be taken down from Facebook because Dr. Dre spilled the beans on camera while in a drunken frenzy (although he never says he’s drunk in the video, so maybe he isn’t). The comments on the video suggested that it is indeed authentic and that Apple Inc. (NASDAQ:AAPL) really is buying Dr. Dre’s company. Reuters is also reporting that its unnamed sources confirm that the deal is really happening.
Of course Apple is very secretive about the deals it does, sometimes not even announcing them even after the deal is complete. Of course with how popular Dr. Dre is, Apple’s going to have to say something if it buys his company.
Acquisition doesn’t make sense for Apple
Apple Inc. (NASDAQ:AAPL)’s $3.2 billion acquisition of Dr. Dre’s company has some people scratching their heads. It’s quite a stretch beyond what it has paid to acquire other companies in the past. CEO Tim Cook said they would continue to acquire smaller startup companies with a maximum price tag of $1 billion. However, he didn’t entirely dismiss the thought of paying more for a company if the deal was still good.
Business Insider is one of those who suggests that this deal doesn’t seem to make any sense. Jay Yarow says he has no idea why Apple Inc. (NASDAQ:AAPL) would buy Beats Electronics. Beats Electronics makes big headphones that are popular with kids, so some think Apple might want to add those products to its offerings. Beats also rolled out a music streaming service recently, but Apple now has iRadio, and critics have said that Beats’ service is one of the worst out there, compared to Spotify and Rdio.