HTC has sold almost half of its 51% holding in audio technology firm Beats Electronics back to Beats' founders for £97m.
The move still leaves HTC as the company’s largest outside shareholder with a 25% stake.
HTC bought 51% of Beats Electronics, which was founded by US rapper and music producer Dr. Dre and Beats' current CEO Jimmy Iovine, for £199m in August last year.
This latest deal leaves Dr. Dre and Iovine as the majority shareholders with a 75% stake in the company.
HTC said the deal ‘provides Beats with more flexibility for global expansion while maintaining HTC's major stake and commercial exclusivity in mobile.’
The manufacturer added that it will continue to work closely with Beats, which makes high-end headphones and speakers.
Analysts say the deal will allow HTC to focus on putting its resources into clawing back marketshare in the smartphone space.
HTC's profits have been hit by rising competition from Samsung and Apple, forcing the manufacturer to review its devices strategy this year, which has seen it focus on delivering a smaller, targeted portfolio of high-end smartphones.