Since a few days, there were rumors floating on the Internet, grabbing everyone’s attention that Google will be buying HTC . But we didn’t knew the entire story or the truth but today, Google and HTC announced it officially .

Google Pixel 2This is Google’s next move to get into Phone Hardware business directly . We remember that they previously acquired Motorola and sold it later, even tech Giant like Microsoft acquired Nokia’s phone division but later sold it to HMD Global and killed Lumia brand but this is not such buyout or acquisition.

Google is just getting the team internally at HTC that is already building the Pixel devices with them .

Just the team working on Pixel devices at HTC are migrating to Google .

This team is led by Rick Osterloh is going to be a part of Google now and a deal for whooping $1.1 Billion was done for this migration . Additionally, Google will be getting a non-exclusive license for HTC intellectual property so that it can be implemented in hardware design at Google .

Now what?

HTC says, that it will look into committing even more on its own HTC branded phones and the HTC Vive, as a part of their Virtual Reality business and all this with the $1.1 Billion cash lying around .

Here is the press release :

Google and HTC Announce US$1.1 Billion Cooperation Agreement

Certain HTC Employees – Many of Whom Worked on Pixel Smartphones – to Join Google Google Receives HTC IP through Non-Exclusive Licensing Agreement

Transaction Reinforces HTC’s Commitment to Innovation and Its Branded Smartphone Business

MOUNTAIN VIEW, Calif. and TAIPEI, Taiwan 
– September 21, 2017 – Google (NASDAQ: GOOG, GOOGL) and HTC Corporation (TWSE: 2489) today announced a definitive agreement under which certain HTC employees – many of whom are already working with Google to develop Pixel smartphones – will join Google. HTC will receive US$1.1 billion in cash from Google as part of the transaction. Separately, Google will receive a non-exclusive license for HTC intellectual property (IP).

The agreement is a testament to the decade-long strategic relationship between HTC and Google around the development of premium smartphones.

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. HTC will also continue to build the virtual reality ecosystem to grow its VIVE business, while investing in other next- generation technologies, including the Internet of Things, augmented reality and artificial intelligence.

For Google, this agreement further reinforces its commitment to smartphones and overall investment in its emerging hardware business. In addition to the talented and experienced team of professionals, Google will continue to have access to HTC’s IP to support the Pixel smartphone family. Additionally, this agreement also represents a significant investment by Google in Taiwan as a key innovation and technology hub.

“As a pioneer of the smartphone market, we are very proud of our history of innovation. Our unmatched smartphone value chain, including our IP portfolio, and world-class talent and system integration capabilities, have supported Google in bolstering the Android market,” said Cher Wang, Chairwoman and CEO of HTC. “This agreement is a brilliant next step in our longstanding partnership, enabling Google to supercharge their hardware business while ensuring continued innovation within our HTC smartphone and VIVE virtual reality businesses. We believe HTC is well positioned to maintain our rich legacy of innovation and realize the potential of a new generation of connected products and services.”

“HTC has been a longtime partner of Google and has created some of the most beautiful, premium devices on the market,” said Rick Osterloh, Senior Vice President of Hardware at Google. “We’re excited and can’t wait to welcome members of the HTC team who will be joining Google to fuel further innovation and future product development in consumer hardware.”

The transaction, which is subject to regulatory approvals and customary closing conditions, is expected to close by early 2018.

Evercore served as financial advisor to HTC and Gibson Dunn and Tsar & Tsai acted as legal counsel. Lazard served as financial advisor to Google and Cleary Gottlieb and Lee & Li acted as legal counsel.

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