Dime Time News: Hip Hop’s 1st Billionaire! Dr. Dre to Sell his Beats by Dre Brand to Apple for 3.2 Billion! [VIDEO]

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The internet went nuts when Dr. Dre announced that he is Hip Hop’s first Billionaire! Thanks to Apple! Apple reportedly buying his Beats by Dr. Dre Brand for 3.2 Billion dollars!



via Biz Journals

Apple is in talks to buy Beats Electronics, the premium headphones brand and music service founded by legendary rapper Dr.Dre, for a reported $3.2 billion, according to a report in the Financial Times.

The deal is still in the discussion stages, so it could still fall through. But if it does happen, it would represent the largest ever acquisition by Apple, a company that has famously avoided major M&A activity despite its massive war chest. Beats is the largest brand in the headphones market, with about 27 percent market share.

The deal would represent a huge premium for Beats, which took a $500M investment from the private equity firm Carlyle Groupin September that put its valuation at about $1 billion. It would also be a major boon for Dr. Dre, whose ownership stake in the company would reportedly make him the first rapper to become a billionaire, catapulting him past current No. 1, Sean“Puffy” Combes, who has a net worth of about $700 million.

The deal, while perhaps not transformative for Apple, cements the company as the premier technology firm for music, a title that it claimed in the early 2000s with the advent of the iPod and iTunes and which has been challenged recently by brands like Beats in hardware and streaming services like Pandora and Spotify in software.

Who loses on this deal? Struggling handset maker HTC Corporation, which owned half of Beats until very recently. The company sold half of its stake for $150 million in early 2013, and then sold the remaining 25 percent in September for $265 million concurrent with the Carlyle investment. Once a leader in the Android market, HTC has seen its revenue and its share of the global smartphone market decline despite relatively well-received handsets, and could definitely used a $1.6 billion payday, which represents more than twice its yearly profit.

 

-DJ Dimepiece “The Mixin’ Vixen” 

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