Beats Audio Buys Back Controlling Interest From HTC
An unlikely partnership was formed when HTC acquired a controlling interest in Beats Audio, the headphone company co-founded by hip-hop/rap artist Dr. Dre. In August 2011, HTC purchased a 51 percent stake for $300 million and promptly gave itself exclusive rights to build smartphones with Beats Audio sound. That arrangement worked well for the two companies, and while the two will continue to work together moving forward, HTC announced that it's selling shares back to Beats Audio.
Beats Audio is buying back about 25 percent of its total shares for $150 million, resulting in 75 percent ownership. HTC will retain a 25 percent stake, making it the largest outside shareholder. More importantly, however, is the fact that HTC retains commercial exclusivity in mobile handsets.
HTC and Beats Audio plan to kick off a joint marketing campaign later this year, though it's not yet known what exactly they'll be promoting. It's hard to tell if this business realignment was about Beats Audio wanting to control its future direction, or if it represents waning interest from HTC, which stopped bundling Beats Audio headphones with smartphones earlier this year.
Beats Audio is buying back about 25 percent of its total shares for $150 million, resulting in 75 percent ownership. HTC will retain a 25 percent stake, making it the largest outside shareholder. More importantly, however, is the fact that HTC retains commercial exclusivity in mobile handsets.
HTC and Beats Audio plan to kick off a joint marketing campaign later this year, though it's not yet known what exactly they'll be promoting. It's hard to tell if this business realignment was about Beats Audio wanting to control its future direction, or if it represents waning interest from HTC, which stopped bundling Beats Audio headphones with smartphones earlier this year.
