HTC to buy stake of Beats Electronics for $309 million
TAIPEI/NEW YORK (Reuters) - Smartphone maker HTC (2498.TW) will buy a 51 percent stake of U.S. company Beats Electronics for $309 million, it said on Thursday, its latest move to fend off rising competition and enhance its branding.
This would be HTC's fifth acquisition this year, as the company fights to increase share in a market where Apple (AAPL.O) and Samsung (005930.KS) are major players.
"Smartphone prices have been falling. HTC will have to differentiate itself by adding value in content or services," said Richard Ko, an analyst with KGI Securities. He expected more deals will be on the way for HTC.
Beats Electronics, which makes high-end headphones and speakers, was founded by Jimmy Iovine and Dr Dre, a U.S. rapper and music producer.
HTC expects the deal to close in coming months and expects to have a number of products that incorporate Beats technology on the market by the end of the year, said Jason Mackenzie, HTC's president for global sales and marketing.
Iovine, chairman and founder of Beats Electronics, will continue to run the company. He is also chairman of Interscope Records, which produced albums such as Bruce Springsteen's "Born to Run."
At midday trading, shares of HTC had slipped 2.6 percent, trailing the main index's .TWII 0.69 percent loss.
(This story is corrected in the 4th and 6th paragraphs to spell Jimmy Iovine instead of Iovene, and the title of Jason Mackenzie in 5th paragraph to HTC's president for global sales and marketing, not Beats Electronics'.)