Smartphone maker HTC Corp (宏達電) said yesterday it had reached an agreement with Beats Electronics LLC, selling back nearly half of its stake in the high-end headphone maker for US$150 million.
HTC, the world’s No. 5 smartphone vendor, announced in August last year it would acquire a 51 percent stake in the US company through its subsidiary, HTC America Holding Inc, for about US$309 million.
The Taiwanese firm has since launched several smartphones equipped with headphones that bear the name of superstar music producer Dr Dre in an attempt to appeal to young customers and requisition market share from Apple Inc and Samsung Electronics Co.
REALIGNMENT
HTC said yesterday in an e-mailed statement that it would still be the largest outside shareholder in Beats after the share sale and the two companies would continue to work closely, including a joint global marketing campaign later this year.
Still, the company is expected to book an investment loss of US$4.88 million, based on the headphone company’s current book value, according to the 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,” HTC said in the statement.
“Under the terms of the agreement, the founding members of Beats will buy back 25 percent of its total shares for a total of approximately 75 percent ownership, with HTC remaining the largest outside shareholder with approximately 25 percent,” it said.
LOAN
Meanwhile, the phone maker has also agreed to offer a US$225 million loan to Beats to fulfill the latter’s working capital requirement, according to a separate statement.
The loan offering came after HTC announced on July 3 that Beats had acquired the digital music streaming service MOG Inc for US$14 million as the US company aims to establish a firm foothold in various parts of digital music platform.
The terms of the loan is a three-month LIBOR (London InterBank Offered Rate) plus 1.5 to 7.5 percentage points and the US company will repay the loan by July 20 next year, with collateral including all the assets of the Beats such as accounts receivable, inventory and intellectual property, HTC said.
Shares in HTC closed up 1.01 percent at NT$300 on Friday in Taipei trading. The stock has dropped 39.64 percent so far this year and plunged 76.92 percent from as high as NT$1,300 in April last year due to an increasingly competitive smartphone market amid a dismal global economic outlook.
When an apartment comes up for rent in Germany’s big cities, hundreds of prospective tenants often queue down the street to view it, but the acute shortage of affordable housing is getting scant attention ahead of today’s snap general election. “Housing is one of the main problems for people, but nobody talks about it, nobody takes it seriously,” said Andreas Ibel, president of Build Europe, an association representing housing developers. Migration and the sluggish economy top the list of voters’ concerns, but analysts say housing policy fails to break through as returns on investment take time to register, making the
EARLY TALKS: Measures under consideration include convincing allies to match US curbs, further restricting exports of AI chips or GPUs, and blocking Chinese investments US President Donald Trump’s administration is sketching out tougher versions of US semiconductor curbs and pressuring key allies to escalate their restrictions on China’s chip industry, an early indication the new US president plans to expand efforts that began under former US president Joe Biden to limit Beijing’s technological prowess. Trump officials recently met with their Japanese and Dutch counterparts about restricting Tokyo Electron Ltd and ASML Holding NV engineers from maintaining semiconductor gear in China, people familiar with the matter said. The aim, which was also a priority for Biden, is to see key allies match China curbs the US
NOT TO WORRY: Some people are concerned funds might continue moving out of the country, but the central bank said financial account outflows are not unusual in Taiwan Taiwan’s outbound investments hit a new high last year due to investments made by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and other major manufacturers to boost global expansion, the central bank said on Thursday. The net increase in outbound investments last year reached a record US$21.05 billion, while the net increase in outbound investments by Taiwanese residents reached a record US$31.98 billion, central bank data showed. Chen Fei-wen (陳斐紋), deputy director of the central bank’s Department of Economic Research, said the increase was largely due to TSMC’s efforts to expand production in the US and Japan. Investments by Vanguard International
Berkshire Hathaway Inc is looking to increase ownership in Japan’s five largest trading houses “over time,” company chairman and CEO Warren Buffett said in an annual letter to shareholders. The conglomerate had originally agreed to keep its holdings in the companies below 10 percent. However, the trading houses have agreed to relax the ceiling “moderately,” as Berkshire approaches the limit, a letter dated on Saturday said. The shares of the five — Mitsubishi Corp, Mitsui & Co, Itochu Corp, Sumitomo Corp and Marubeni Corp — have benefited over the longer-term from Buffett’s interest. However, they have struggled in recent months, along with
RSS