Apple is set to snap up music recognition app Shazam for £300m, less than half the price it was once said to be worth.
The deal, which is to be unveiled this week, would make the British tech firm the latest company to be taken over by an overseas giant – following in the footsteps of Paysafe and Imagination Technologies, which were snapped up earlier this year.
Shazam was set up in London in 1999 by four US expats and lets users identify music via their smartphone or computer simply by listening to a snippet of sound.
It has more than 100m monthly users and at the height of its success was valued at $1bn (£747m).
The deal would be Apple’s biggest takeover in the UK and comes as the government seeks to tighten controls on takeovers by foreign companies.
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Shazam makes most of its sales from commissions paid on referrals to Apple’s iTune stores, but has struggled to profit from its user base – reporting a £4m loss on sales of £40m last year.
In an bid to boost sales the firm has ventured into augmented reality, using its technology to provide links to music during TV shows and advertising breaks. It even launched American game show ‘Beat Shazam’ earlier this year.
Apple plans to incorporate Shazam’s technology into its music streaming service Apple Music and save money on commissions, according to reports.
The buyout would also give it an edge over rival Spotify, as Shazam would no longer be referring users to the service.
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Apple is playing catch-up with Spotify, which dominates the music streaming market with 60m users compared to Apple Music's 30m.
Spotify, which is expected to float in New York next year, last week cut a deal with Chinese internet giant Tencent, which will see the two companies buy stakes in each other.
Shazam could not be reached for comment.