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Alphabet-owned Google announced a definitive agreement with HTC on Sept. 21 under which 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.

The transaction is subject to regulatory approvals and expected to close by early 2018. It represents a significant investment by Google in Taiwan as a key innovation technology hub.

The agreement is a “testaments to the decade-long strategic relationship between HTC and Google around the development of premium smartphones,” the two parties said in a press statement.

HTC said the agreement will support its continued branded smartphone strategy, enabling a more streamlined product portfolio, more operational efficiency and financial flexibility. The Taiwan-based company also insists it will “continue to have the best-in-class engineering talent” to work on its next flagship phone, following the launch of the HTC U11 this year.

“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,” said Chairwoman and CEO of HTC, Cher Wang. “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.”

HTC said it will continue to build the virtual reality ecosystem to grow its VIVE business, while investing in other next-generation technologies, including the Internet of Things (IoT), augmented reality and artificial intelligence (AI).

For California-based Google, the agreement will further its commitment to smartphones and overall investment in its emerging hardware business, the company said. In addition to the HTC professionals joining its team, Google said it will continue to have access to HTC’s IP to support the Pixel smartphone family.

“HTC has been a longtime partner of Google and has created some of the most beautiful, premium devices on the market,” said Rick Osterloh, Senior Vice President of Hardware at Google. “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.”