Google and HTC 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 aims to be 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.

Cher Wang, HTC CEO says, “As a pioneer of the smartphone market, we are very proud of our history of innovation.

“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.

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

Rick Osterloh, Google senior vice president of hardware says, “HTC has been a longtime partner of Google and has created some of the most beautiful, premium devices on the market.

“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.