Apple has confirmed it is moving forward with a deal to buy Beats Electronics.
News of a possible bid for Beats broke a couple of weeks ago and Apple has now announced it is buying the company in a deal worth a total of $3 billion (£1.8 billion).
This is Apple's largest acquisition ever and will give the firm access to Beats Music, a new streaming service that has become a rival to Spotify in the last few months.
Beats is still best known for its highly recognisable headphones brand, which is used by celebrities from rock stars to footballers and everyone in between.
As part of Apple's purchase of Beats Electronics, Beats co-founders Jimmy Iovine and Dr Dre are set to take new roles at Apple.
Apple boss Tim Cook said in a statement that buying Beats will enable the company to "continue to create the most innovative music products and services in the world".
It is likely that another key reason behind the purchase of Beats Electronics is Apple's desire to retain the coolness of its brand and bringing Dr Dre and Iovine on board is expected to contribute to that aim.
Investment in music
Mr Cook added: "Music is such an important part of all of our lives and holds a special place within our hearts at Apple. That's why we have kept investing in music and are bringing together these extraordinary teams."
Iovine also noted that he always believed the home of Beats Electronics would be Apple. He said: "The idea when we started the company was inspired by Apple's unmatched ability to marry culture and technology. Apple's deep commitment to music fans, artists, songwriters and the music industry is something special."
Apple's iTunes software is one of the most-used music products in the world, but the company has been struggling to retain relevance in recent years as rival firms gained ground.
The share price of the firm slipped back by 0.26 per cent on the Nasdaq yesterday (May 28th), but rebounded with a 0.09 per cent increase in after-hours trading on the US stock market.
Find up to date information on the FTSE 100 and spread betting strategies at City Index
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.