Taiwanese smartphone maker HTC has announced that it will acquire a 51% stake in Beats Electronics, a U.S. high-end headphones and speakers maker, for about USD300 million.
The acquisition will reportedly be completed at the end of the third quarter of 2011 and HTC's products that incorporate Beats' technology will be launched in the fourth quarter.
In regards to the question if the investment is too expensive, Winston Yung, chief financial officer of HTC, said it is a good investment for HTC, because Beats features high profit gross margin, high operating growth, and large cash flow. After HTC become the major shareholder, it will gain Beats' trademark, technologies, and all intellectual property.
Jimmy Iovine, chairman and founder of Beats Electronics, will continue to run the company after the acquisition.