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Beats possibly looking to drop HTC as investor, replace with another

updated 05:30 am EDT, Mon August 19, 2013

Report claims Beats Electronics plans buyback of remaining shares from HTC

The producer of the Beats by Dr. Dre headphone line could be forcing out HTC as an investor and replacing it with another in the future, according to a report. Beats Electronics is said to be looking to buy back the remaining 25-percent ownership stake controlled by HTC, a move similar to one performed by the company last year after allegations of HTC failing to meet certain contractual obligations.

HTC acquired a 50.1-percent stake in the company in August 2011 for $300 million, giving HTC a controlling share in the manufacturer. It is not clear why exactly Beats is considering buying the remainder back, according to the Wall Street Journal, but it is believed that the company is trying to broaden its business into a number of new areas, such as streaming music, with a new investor providing debt financing.

An attempt by Beats to remove HTC from the equation comes at a time when the phone manufacturer is launching a new global marketing campaign, in order to improve its brand recognition and its finances, with the potential loss of Beats harming HTC's carefully-laid plans.

by MacNN Staff



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