Apple Inc. will pay $1 billion to buy Beats Electronics Inc. for $100 million in cash, a person familiar with the transaction said on Friday, marking the biggest acquisition of a high-tech company in years.
The deal is expected to close within days, the person said.
The buyout would create the world’s biggest maker of headphones and other audio devices, which includes Beats Electronics.
It would also create a bigger company, and the company’s biggest customer, by making Beats one of Apple’s biggest brands, according to the person, who was not authorized to speak publicly and asked not to be identified because the transaction is confidential.
The $1.5 billion deal will be Apple’s largest in global history, eclipsing the $1bn it paid for Beats in December for Beats Electronics, which makes headphones and earbuds.
Apple shares have soared to more than $200 a share since the deal was announced.
The stock has surged nearly 50% this year, fueled by optimism about the future of Beats and Apple.
The purchase would give Apple a major foothold in the smartphone market, and would provide an immediate boost to Beats as it ramps up its music streaming service.
It’s the latest in a string of acquisitions for Apple, which is seeking to improve its profitability and boost its competitive position in the growing $4 trillion global music market.
Apple will also be able to take advantage of Beats’ patent portfolio.
The company’s patent portfolio includes some of the most popular smartphone technologies, including iOS, iTunes and the Beats logo.
The Beats acquisition comes after Apple in December bought Beats Electronics for $3.5 trillion, marking its biggest acquisition in history.
Beats Electronics said last week that it expects to make a profit on the deal, which could help it meet the $2 billion in cash it needs to fund a restructuring.