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July 7, 2011

HTC to acquire S3 Graphics to get patent portfolio

HTCC is fighting lawsuits on patent infringement's filed by Apple

By CBR Staff Writer

Taiwan-based smartphone maker HTC will acquire S3 Graphics in a $300m cash deal.

HTC hopes the purchase will allow it access to patents as it fights Apple on patent infringements, reported Bloomberg.

The image-compression technology of California-based S3 Graphics is used by Nintendo and Sony on their gaming machines.

Chief financial officer Winston Yung said that the company will pay $300m to sellers VIA Technologies (12.5% stake), and WTI Investment International, a holding company.

Yung said that VIA will receive $147m, while WTI will get $153m.

"Buying a patent portfolio will be very useful to us," Yung told Bloomberg.

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However, HTC dipped the most in three weeks in Taipei trading. This happened after Citigroup cut the stock’s rating and raising concerns over HTC’s plans to acquire S3 Graphics, reported Bloomberg.

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