Taiwan-based smartphone maker HTC Corp would be selling back the 24.84% stake it holds in Beats Electronics. The deal with the headphone maker would be valued at USD 265 million. In a filing to the Taiwan Stock Exchange, HTC said it expected to get pretax profits of NTD 2.52 billion or USD 85 million from the sale. As part of the deal, Beats would need to repay a promissory note of USD 150 million plus interest to HTC. The sale is expected to close in the fourth quarter of this year.
HTC acquired a 51% stake worth USD 300 million in Beats two years ago. Since then, it has grappled with stiff competition from Samsung and Apple in the smartphone market. HTC now holds less than 3% of the market share in the smartphone industry.
JI Asia Analyst Jean-Louis Lafayeedney told Bloomberg that the transaction would address HTC's need for cash. "Investors have been asking HTC to shed assets and get cash back to help them regain profitability," he added.
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