Thursday, January 30, 2014

Lenovo acquires Motorola Mobility from Google for $3 billion

Google announced that it has reached an agreement to sell Motorola Mobility to Lenovo. The Chinese electronics giant will pay approximately $2.91 billion for the smartphones business with $1.41 billion due at the deal’s closing in cash and ordinary shares, and the remaining $1.5 billion as a three-year promissory note.

As part of the deal, Google will retain the bulk of Motorola’s massive patent portfolio, including current applications and invention disclosures. Lenovo will acquire about 2,000 patents alongside the Motorola Mobility brand and its trademarks. The Chinese company will receive a license for the remainder of Motorola’s portfolio which will remain at Mountain View.
After acquiring Motorola for $12.5 billion in 2012, Google raised the company’s profile last year with the launch of the characterful Moto X and Moto G duo of smartphones. Despite its efforts however, Motorola Mobility continued losing money each quarter.
Motorola’s acquisition will give Lenovo a much needed presence on the lucrative smartphone market in the United States (Motorola is currently number 3 smartphone manufactuer in the United States). It will also help the company counter the slumping sales of personal computers by expanding its focus on mobile devices.
Furthermore, the deal marks the acquisition of another legendary American technology brand by Lenovo. Back in 2005, the company bought the venerable ThinkPad division from IBM.
The transaction between the two companies is subject to regulatory approvals in both the United States and China.

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