HTC acquired a majority stake in Beats Electronics for $300 million last year, as part of a strategic partnership which involved HTC integrating Beats audio technology into its smartphones. Since then, HTC has launched a number of Beats enabled smartphones, not many of which have been very successful. However, it seems that Beats has bought back nearly 25% of its total shares from HTC for around $150 million.
Following the share buyback, Beats now owns around 75% of its total shares while HTC remains the largest external shareholder with a 25% stake.
HTC will continue to have exclusive rights to use Beats audio technology in its phones.
Here’s the official statement:
“HTC and Beats today announced a realignment of their business agreement that provides Beats with more flexibility for global expansion while maintaining HTC’s major stake and commercial exclusivity in mobile.
Under the terms of the agreement, the founding members of Beats will buy back 25% of its total shares for a total of approximately 75% ownership, with HTC remaining the largest outside shareholder with approximately 25%.
Over the last year, HTC and Beats have made great progress in sound innovation, product integration and brand awareness with successes like the HTC One. HTC and Beats will continue to work closely, including a joint global marketing campaign later this year.”
This could be beneficial for both HTC and Beats, as it doesn’t impact HTC’s technology deal much and gives it some cash back, but also provides Beats with the flexibility to expand internationally.