Two years after deal first inked, Beats wants to buy back HTC's remaining 25 percent stake, according to The Wall Street Journal
Headphone maker Beats By Dr. Dre could be looking to end its partnership with HTC by buying back the company's remaining 25 percent stake, according to reports from The Wall Street Journal. The newspaper says it's learned from "people familiar with the matter" that Beats wants to bring in new investors to provide debt financing and take a minority ownership stake, allowing Beats to buy back HTC's share in the company. The news comes after Beats was forced to abandon a $700m refinancing deal earlier in the year that would've also allowed it to buy out HTC's share.
At the peak of its success back in mid-2011, HTC paid more than $300 million for a 50.1 percent stake in Beats. However this was reduced to a 25% share a year later, when Beats bought back half of the Taiwanese manufacturer's share. HTC has also stopped including Beats earphones with its products, instead focusing on Beats-branded software audio processing on handsets like the HTC One. The WSJ reports that differences over strategy soured the partnership between HTC and Beats. HTC's fortunes have also declined dramatically since the deal was first inked two years ago, on account of fierce competition in the smartphone space.
For its part, Beats is reportedly looking to expand aggressively into the areas of car and home audio systems, as well as introducing a music streaming service, building upon its success in the premium headphone space. Should Beats buy back HTC's remaining stake, it's unclear how this might affect co-branded HTC devices. But it's possible it could open the door to other manufacturers releasing Beats-endorsed handsets in the long-term future.
Source: The Wall Street Journal