Rhapsody, the largest online on-demand music service in the United States with over 750,000 subscribers, today announced that has signed an agreement with Best Buy Inc. to acquire Napster, the second largest online on-demand music service in the U.S.

Under the terms of the agreement, Rhapsody will acquire Napster subscribers and certain other assets, and Best Buy will receive a minority stake in Rhapsody. Best Buy purchased Napster in September 2008 for $121 million U.S.

"This deal will further extend Rhapsody's lead over our competitors in the growing on-demand music market," said Jon Irwin, president, Rhapsody.

Rhapsody says it will combine the subscriber bases of the two services in the United States. Rhapsody does not operate in Canada while Napster does so it is unclear whether either or both will continue to operate in this country.

Final details of the transaction, which is expected to close on or around November 30, 2011. were not released.

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