By Brian FungAssociated PressApple is getting ready to pay an undisclosed sum for a controlling stake in the maker of a cell phone that is expected to be one of the biggest investments in the mobile space.
The deal, which would be announced as soon as Thursday, would allow Apple to take control of a company that, according to industry analysts, has been making the most noise in the wireless space in recent years.
The acquisition is expected by some analysts to close in the first quarter of next year, a turnaround that could boost the stock’s value.
The iPhone maker has struggled to regain market share from Samsung Electronics Co. in recent quarters, and its stock has been on a tear.
Its shares have gained almost 7% this year.
The buyout of Beats Electronics Inc., which owns Beats Music Inc., is the latest move in a trend by Apple and other tech giants to diversify their holdings and boost their value in the coming years.
Apple also has invested in the smartphone maker ZTE Corp. and other smartphone makers, including the Google Inc. maker.
The stakes for the Beats deal are not known.
But they are significant enough that they could potentially bring Apple’s stake in Beats Electronics down to 10% or less, according the analysts at Credit Suisse.
The transaction, which could be completed as soon or as late as next year or early next year depending on the outcome of the ongoing litigation, could boost Apple’s value in a market that is still largely dominated by Samsung Electronics.
The companies’ share of the smartphone market fell by about 1.5% in the second quarter of 2018, according data from research firm IDC, as consumers and carriers continue to shift away from Samsung and other brands.
The U.S. mobile market grew by about 6.7% in 2018, the fastest growth since 2015, according a report from IDC.
That’s less than a quarter of the 5% growth that analysts say is likely in the U.K. and Germany, the two countries that dominate the global mobile market.
Analysts expect the deal will provide Apple with a large financial stake in a company it has long called “a disruptive force in the industry.”
The deal is expected, the analysts said, to add to Apple’s $300 billion investment in Beats, which is the largest acquisition in the music industry in history.
Beats is expected buy into Beats Electronics.
“It is not yet clear how much Apple is prepared to pay for the stake, but the transaction could close the deal at a price in excess of $200 million,” they wrote.
The analysts did not give an exact figure for the acquisition price.
Beats has said it would pay $1 billion for the $2.4 billion stake, a value it did not disclose, but some analysts have said it could be in the neighborhood of $2 billion.
The stock has risen more than 6% this week as investors wait for the latest news about Apple’s plans to sell its stake in wireless giant Verizon Communications Inc. Verizon’s stock has gained nearly 30% this month, and analysts say that would be a new high for the stock.