Google expands smartphone business in $1bn HTC deal

Google has bought part of Taiwanese technology company HTC (Shenzhen: 200771.SZ - news) in an effort to further expand its smartphone business.

The Silicon Valley tech giant announced that it is spending $1.1bn (£820m) to acquire the team that developed its Pixel smartphone, released in 2016.

About 2,000 employees, which represent half of HTC's existing smartphone development workforce, will move to Google as a result of the acquisition.

The deal is a cash transaction and won't see Google take a stake in HTC, as had been speculated earlier in the week.

Shares (Berlin: DI6.BE - news) in HTC were suspended on Wednesday as rumours of an all-out buyout deal by Google's parent company Alphabet (Xetra: ABEA.DE - news) abounded.

Google has been pushing its new Pixel phone as an increasing number of people are using its services with mobile devices.

The technology giant has announced it will host a live event at the beginning of October, where new versions of the firm's Pixel and Pixel XL will be unveiled.

Thursday's announcement is another sign of how serious Google is about carving out a bigger space for itself in the already competitive smartphone market.

It also highlights Google's commitment to developing more of its own hardware, rather than relying on other technology companies' devices to host its Android software.

HTC's shares remained suspended on Thursday following the announcement.

If approved by regulators the deal is expected to be completed by early next year.