Beats by Dre, the Santa Monica-based maker of high-end headphones founded by rap pioneer Dr. Dre and veteran music executive Jimmy Iovine, is expected to shortly announce a deal to acquire digital music service MOG, according to executives familiar with the transaction.

The agreement, which is not yet finalized, calls for Beats to pay roughly $10 million for MOG, a Berkeley, Calif.-based streaming service with about 500,000 subscribers.

A MOG spokeswoman was not immediately available for comment. A Beats spokesman declined to comment.

The Times reported in March that the two companies were in acquisition talks. A deal could be announced within days, said people with knowledge of the matter.


Should the transaction go through, Beats would use MOG’s technology to build on-demand music services into its products. Though the companies have no concrete plans to do so, MOG’s service also could be embedded in devices made by HTC Corp., a Taiwanese manufacturer of cellphones and other mobile electronics. HTC in August paid $300 million for an undisclosed stake in Beats.

Under the proposed acquisition terms, MOG would continue to service its existing customers but shift its emphasis to being a technology platform for products sold by Beats and HTC, said executives who declined to be named because the negotiations are confidential.

As such, MOG Chief Executive David Hyman would remain with the company and work closely with the Beats’ chief operating officer, Luke Wood, as well as Iovine, who is also chairman and chief executive of Interscope Geffen A&M, a top label under Universal Music Group.

Investors in MOG include Menlo Ventures, Balderton Capital, Simon Equity Partners, Universal and Sony Corp.


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