Today it was announced that Google will spend $1.1 billion to acquire HTC's phone unit, expand its hardware engineering teams with HTC employees, and acquire non-exclusive intellectual property rights.

What HTC is not Selling

Early this month, Bloomberg reported that HTC Corp. was reported to be exploring strategic options, including spinning off its VR business unit. Shortly after the rumors, HTC confirmed that it was not selling its unit, but instead focusing on growing the Vive business unit.

Consequences of the Deal

There are several likely consequences of the announced deal.

Google expands key employees by hiring around 2,000 HTC employees who had been working in HTC's Pixel unit. Moreover, the deal makes strategic sense as HTC was a primary partner for the recently launched Google Pixel phones, and is helping Google make one of the second generation Pixel models set to be released on October 4th.

In the stock market, Google is trading slightly up 0.17% to $949.27, while competitors like Apple is down 1.31% at $153.95 a share after the announcement.