Something happened that people familiar with the situation wrote about in August already. Beats Electronics (owns Beats Audio brand) acquires remaining shares from HTC. The Taiwanese manufacturer is selling 24.84% of the shares for $ 265 million.
In this case, we can say that it was HTC who had the greatest benefit from the two-year’s collaboration. First, all the while it was actively using the popular premium Beats Audio brand in their smartphones, and secondly, it earned on the deal more than invested. The fact is that in 2011, 50% of the shares were acquired by HTC for $ 300 million, then Beats Electronics purchased 25% for $ 150 million, and now the remaining part for 265. That is, HTC eventually earned income about $ 115 million.
The press release announcing the shares repurchase deal notes that Beats Electronics continues to be an important partner for HTC, but did not specify how much important. But, most likely, Beats Audio logo will still appear on the new smartphones of the Taiwanese manufacturer.
It should be recalled that Beats Electronics was established in 2008 by the music producer Jimmy Lovin and hip-hop – artist Andre Young, better known as Dr. Dre. Premium class headphones are manufactured under Beats by Dr. Dre brand.
In August 2011, HTC and Beats announced a large-scale cooperation. The Taiwanese manufacturer has acquired 50.1 % interest in Beats for $ 300 million hoping that the use of the brand will allow it to increase the sales of smartphones in the U.S. market. However, as we know, this did not happen – HTC managed to obtain the biggest share of the U.S. market only in 2010.
Due to the fact that Beats has not received an adequate return from the partnership with HTC, the founders and co-owners repurchased a half of HTC shares (ie 25% of all securities) in July last year. And now HTC has fewer opportunities to help develop Beats – the financial situation does not allow, but the American manufacturer has big plans for the future, in particular for the release of new products. Therefore, Beats Audio is repurchasing the remaining interest and will now look for new investors – more affluent and interested in the brand development.
Dmitriy Smirnov,
Source: http://hi-tech.mail.ru
