Beats Electronics realigns agreement with HTCBy Hanleigh Daniels 23 July 2012 | Categories: news
Taiwanese smartphone and tablet maker HTC and Beats Electronics have announced a realignment of their business agreement, which the two firms struck less than a year ago.
Under the terms of the new deal, the founding members of Beats will buy back 25% of the audio firm’s shares, giving them the majority stake within a company of around 75% ownership. HTC will remain the biggest outside shareholder of the firm holding onto its remaining 25% stake. The financial terms of the new deal has not been disclosed, but is worth $150 million according to CNet.
Beats Electronics stated that this new agreement will provide it with more flexibility when it comes to the global expansion of its operations. HTC will hang onto a large chunk of the company, but also its arrangement for commercial exclusivity for Beats Audio-powered sound within smartphones such as the HTC One S.
The two firms stated that they will also continue to work closely together on projects that includes a joint global marketing campaign that kicks off later this year.
In August last year HTC made a strategic investment in Beats Electronics, becoming a majority (51%) shareholder of the audio firm co-founded in 2006 by legendary rapper and hip hop producer Dr. Dre and Interscope Geffen A&M chairman Jimmy Iovine. HTC paid approximately $300 million for that agreement.
In related news, Beats Electronics also recently announced its first acquisition, after agreeing to purchase the on-demand digital music service MOG. The music firm forked out $14 million (approximately R113 million) for MOG.
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