Lenovo in talks to acquire HTC: Report

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Lenovo's been rumoured to be in talks for quite some time with a number of smartphone makers, including BlackBerry, for an acquisition deal.
 
However, it's now also being reported that the Chinese device maker, which had acquired the consumer hardware business of IBM, is in talks with ailing smartphone maker HTC for acquiring the Taiwanese handset manufacturer's mobile business.
 
Lenovo and HTC have been in confidential discussions since August according to a report by AndroidBeat, that cites Taiwanese publication Apple Daily as a source.
 
The report mentions that Lenovo intends to acquire HTC's brand, similar to the acquisition of IBM's ThinkPad brand. It adds that the specific terms of the deal are not known as the valuation could change. However, it does state that the buyout could be announced and concluded during the first half of 2014.
 
HTC had slipped into the red for the first time in the third quarter of 2013, with sales hit hard by fierce competition in the smartphone market, apart from supply chain constraints and internal turmoil. It posted an operating loss of Taiwanese-$3.5 billion as sales for the quarter tumbled by a third from the same period last year. The losses were more than what analysts expected and they said that the company's immediate future looked bleak.
 
However, Cher Wang, HTC's chairwoman and co-founder, has repeatedly ruled out selling the company, responding to growing speculation about a possible merger. She currently owns 3.8 percent of HTC.
 
Similar to other struggling companies in the sector including Nokia and BlackBerry, HTC has not been able to match the product and marketing might of Apple and Samsung and its problems have only increased by supply chain constraints, an internal turmoil and executive exits.
 
Previously, analyst Sanford C. Bernstein & Co had also said that three Chinese vendors, Huawei, Lenovo, and ZTE, were looking at taking over HTC with an intent to leverage the $4.2 billion Taiwanese giant's technological know-how and brand prowess in the mobile devices segment.
Tags: HTC,Lenovo

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