It’s not the full acquisition we were hoping for, but Google has just officially announced that they have signed a deal with HTC Corporation to acquire a part of HTC’s smartphone team as well as non-exclusive intellectual property (IP) rights. The deal was expected to come today given that stock trading was halted the day before pending a “major announcement” and multiple reports from Reuters and Bloomberg. As Reuters notes in its coverage, the deal was signed for approximately $1.1 billion.
In the official announcement, Rick Osterloh, Senior Vice President of Hardware at Google, issued a statement on what this investment will mean for the two companies:
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.
HTC will receive the $1.1 billion cash infusion through selling off part of its smartphone team in order to continue to make their own devices. This deal does not seem to include the selling of any factories or manufacturing assets, though, so Google is likely to continue partnering with third-parties in order to manufacture their next generation smartphones. This acquisition will make in-house designing of future products easier for Google, however.
As for HTC, the company has confirmed that they are continuing work on their next generation flagship smartphone, whatever that may be:
This agreement also supports HTC’s continued branded smartphone strategy, enabling a more streamlined product portfolio, greater operational efficiency and financial flexibility. HTC will continue to have best-in-class engineering talent, which is currently working on the next flagship phone, following the successful launch of the HTC U11 earlier this year.
The company also notes in its press release that the deal will clear regulatory hurdles by early 2018.
The move should not come as a surprise as Google has long worked with HTC on its Nexus and Pixel models. It is also expected to be making one of the two second generation Pixel devices that will be announced on October 4th.
The story is developing and additional details will be posted as soon as information becomes available.