Struggling smartphone maker HTC has revealed that Beats Electronics has bought back a large chunk of the stake the Taiwanese company used to own in the audio equipment firm.
According to a statement sent by HTC to the Taiwan stock exchange, HTC has sold back 25 percent of the stake it has in the maker of the popular headphones branded Beats to its cofounders.
Beats Electronics was founded by rapper and producer Dr. Dre and Interscope Geffen A&M Chairman Jimmy Iovine who also is now more popularly associated with the hit TV franchise American Idol.
HTC did not disclose in the filing how much the buyback cost Beats, Reuters reports. However, other reports including one from Slashgear’s Chris Davies says that HTC got $150 million from the audio equipment maker for the deal.
Back in August last year, HTC announced that it has acquired a 50-percent stake in Beats with the other half of the company owned by its cofounders.
As it now stands, Beats is 75-percent owned by its cofounders and 25-percent owned by HTC.
According to HTC and Beats, the deal is part of a “realignment” of interests between the two companies but some observers note that this may be the start of HTC pulling out of the partnership with Beats.
HTC has recently announced its expectation for the second quarter of the year and it does not look good. HTC said that they expect their quarterly net profit to decline a massive 57 percent to $247.7 million.
This deal reportedly worth $150 million may be a move in part of the Taiwanese smartphones maker to stay more liquid during the rough patch it is expecting.
HTC is toughing it out with smartphone market overlords Apple and Samsung in the highly-competitive market.
HTC and Beats Electronics have not provided any clear reason for the buyback other from the “realignment” effort and that Beats now has more flexibility for global expansion but the news has spurred some reports to speculate that the managements of both parties are not agreeing with each other.
Nonetheless, HTC did say in a joint statement with Beats Electronics that the smartphone maker still enjoys a “major stake and commercial exclusivity in mobile” for Beats Audio technology.
Last April, HTC decided to stop bundling premium Beats headphones with its smartphones saying that “an accessory like the headphone doesn’t factor in when someone is buying a smartphone. If they want a Beats headphone, they’ll buy it directly.”
Image from he&lei on Flickr (CC)