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Taiwanese smart-phone manufacturer HTC Corp is acquiring a controlling stake in Beats Electronics - a US headphone maker established by rap star Dr Dre - as it races against bigger rivals Apple Inc and Samsung Electronics to expand its product offerings in the smart-phone market. HTC will pay USD309 million to acquire a 51 percent stake in the US company as part of a strategic partnership.
The two brands will focus on bringing high performance sound to HTC phones, according to a joint statement released by both companies on August 11.
HTC and Beats have been working together to create superior mobile audio experiences for consumers, which will result in a line of HTC devices integrated with Beats sound innovations, available this fall, the statement said.
“Beats has found a unique way to harness the popular culture in a manner that is unlike any other brand today,” said Peter Chou, CEO of HTC. “It’s an exciting brand that has been built around providing something very special, and we believe our strategic partnership will provide customers with unbeatable sound on HTC phones. We obsess over every detail of a consumer’s mobile experience and audio is a critical part of that experience.”
Following the acquisition, Beats Electronics will continue to operate autonomously with current chairman Jimmy Iovine and the president and COO Luke Wood retaining their positions. Beat’s current business partnerships that include Monster Cable Products Inc., Hewlett-Packard and Chrysler Group LLC will also remain intact after the acquisition. Iovine will also continue serving as chairman of Interscope Geffen A&M Records.
Established in 2006, Beats Electronics is the brainchild of legendary artist and producer Dr. Dre and Iovine who set out to develop a new type of headphone with the capability to reproduce the full spectrum of sound that musical artists and producers hear in professional recording studios.
This is HTC’s fifth acquisition so far this year, according to data provider Thomson Reuters. On August 5, it announced a plan to acquire Seattle-based mobile-web application company Dashwire for USD18.5 million.
In July the Taipei-listed company, which ranks fifth globally among smartphone makers, agreed to pay USD300 million to buy California-based provider of image-compression technology S3 Graphics to expand its patent portfolio as it battles against infringement lawsuits from Apple Inc.
HTC in February announced its intention to buy London-based digital content provider Saffron Digital for 30 million British pounds and US-based on-demand gaming service provider OnLive, for USD40 million.
With the acquisition announcement, cross-border M&A deals from Taiwan have now reached USD2 billion this year, the highest level since 2007 with 42 announced deals, according to Thomson Reuters.
