Beats co-founders, Dr. Dre, and Jimmy Iovine will join Apple as part of the deal

Apple has finally announced it will acquire headphone maker Beats Electronic for $3 billion, including $2.6 billion cash up front and approximately $400 million in stock that will vest over time.

As part of the deal, Beats co-founders, Dr. Dre, and Jimmy Iovine will join Apple in undisclosed roles.

“Music is such an important part of all of our lives and holds a special place within our hearts at Apple,” CEO Tim Cook said in a statement.

“That’s why we have kept investing in music and are bringing together these extraordinary teams so we can continue to create the most innovative music products and services in the world.”

This acquisition is Apple’s biggest ever, and largest since it brought back Steve Jobs in 1997 through a $400 million purchase of NeXT.

However, the $3 billion price is still just a tiny fraction of the company’s $150 billion cash reserves, and Beats’ estimated annual sales of $2 billion represents barely over 1% of Apple’s $171 billion revenue last year.