Tech giant Alphabet Inc’s Google has signed an agreement with HTC to buy a division of the Taiwan-based smartphone major's business for USD 1.1 billion, the companies announced on Thursday.
Under the deal, Google would pay $1.1 billion to HTC Corp for the division that develops the US firm’s Pixel smartphones. The deal would include HTC employees who worked on Pixel smartphone and intellectual property rights, the two companies said in a statement, without disclosing the number of staff involved.
"HTC will receive USD 1.1 billion in cash from Google as part of the transaction. Separately, Google will receive a non-exclusive license for HTC intellectual property (IP)," the statement said.
This agreement will help HTC to focus on enabling a more streamlined product portfolio, greater operational efficiency and financial flexibility.
"In addition to the talented and experienced team of professionals, Google will continue to have access to HTC's IP to support the Pixel smartphone family," it said.
The agreement is a testament to the decade-long strategic relationship between HTC and Google around the development of premium smartphones, both companies said.
"With this agreement, a team of HTC talent will join Google as part of the hardware organization. These future fellow Googlers are amazing folks we’ve already been working with closely on the Pixel smartphone line, and we're excited to see what we can do together as one team. The deal also includes a non-exclusive license for HTC intellectual property," Rick Osterloh, Senior Vice President of Hardware at Google said in a blog.
“HTC has been a longtime partner of Google and has created some of the most beautiful, premium devices on the market,” he said. “We're excited and can't wait to welcome members of the HTC team who will be joining Google to fuel further innovation and future product development in consumer hardware.”
Cher Wang, the Chairwoman and CEO of HTC, said the agreement will enable Google to supercharge their hardware business while ensuring continued innovation within HTC's smartphone and VIVE virtual reality businesses. "We believe HTC is well positioned to maintain our rich legacy of innovation and realize the potential of a new generation of connected products and services.”
The agreement also marks a significant investment by Google in Taiwan as a key innovation and technology hub.
The transaction, which is subject to regulatory approvals and customary closing conditions, is expected to close by early 2018.