AKIPRESS.COM - 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.

Iovine, 61, and Dre, 49, will both become key executives in Apple’s music divisions, though Cook said their roles haven’t been determined yet. Cook indicated Beats’ music streaming service was the main selling point in the deal, though the headphone line is also expected to continue growing as well.

Although he believes most technology companies are “culturally inept,” Iovine said he believes Apple will empower Beats to realise its goals of improving the sound of digital music and creating playlists tailored for each subscriber.