Due to the gap in expectations regarding purchase price, negotiations between Pantech & Curitel and Audiovox for the acquisition of Audiovox's affiliate, ACC (Audiovox Communications Corporation), fell through. The US distributor has instead entered into an agreement to sell to UTStarcom. The total purchase price was set at US$165.1 million in cash, and the acquisition is expected to close in the fourth quarter of 2004.
As part of the agreement UTStarcom will gain a five-year royalty free licensing agreement to use the Audiovox brand on designated products. UTStarcom has stated that ACC's channels will also be used to sell its own CMDA phone designs, which will be manufactured in China at facilities that currently mass-produce PAS (Personal Access Phone System) handsets.
ACC is the only channel player supplying all CMDA operators in North America. Pantech & Curitel had been completely reliant on ACC for North American distribution. However, in March of 2004 Pantech & Curitel had put a team in place to evaluate how to penetrate the US market should the acquisition fall through. Concluding that directly running channels to distribute own-brand phones would be the best alternative, the company already has plans to build six sales outlets, three repair and logistics centers, and a headquarters in Los Angeles before the end of 2004. The Korean maker is also currently working to directly supply handsets to Verizon Wireless.
Although Pantech & Curitel will not be purchasing ACC, their cooperation will continue, at the earliest concluding near the first half of 2005.