HTC buys S3 Graphics for $300m

The smartphone maker, which is in a messy legal battle with Apple over patent infringement, has bought another company that is suing Apple over compression-related patents

HTC has agreed to buy graphics visualisation company S3 Graphics, a patent foe of Apple, from Via Technologies and WTI Investment International.

On Wednesday, processor maker Via said the $300m (£187m) sale of S3 to Taiwanese phone manufacturer HTC will "allow Via to monetise a portion of its rich IP portfolio, yet retain its graphics capabilities to support the development and sale of its processors and chipsets".

S3 makes graphics processing units (GPUs) and licenses its technology to game console companies such as Nintendo, as well as to PC and mobile phone companies. It is in the middle of a legal patent tussle with Apple over technology used in Mac computers and iOS devices. On Friday, it won an initial decision from the ITC, which said Apple had infringed on two S3 patents relating to image compression.

Apple and HTC are already battling it out in the US courts over alleged infringement of each other's smartphone-related patents.

Via has owned S3 since 2001, and in 2005 it brought in WTI Investment International to provide extra capital. The terms of the deal announced on Wednesday will see Via get $147m and WTI $153m.

The deal is expected to close by the end of 2011, subject to regulatory approval and other customary conditions.

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