Thursday, January 30, 2014

Google Inc. has announced that it has decided to sell the smartphone unit of Motorola Mobility to Chinese company Lenovo, in a deal that is valued at $2.91 billion and will see Google retain most of Motorola’s important patents.

Lenovo and Google today have entered into a definitive agreement under which Lenovo plans to acquire the Motorola Mobility smartphone business. With a strong PC business and a fast-growing smartphone business, this agreement will significantly strengthen Lenovo’s position in the smartphone market.
Lenovo acquires Motorola Mobility from Google

In addition, Lenovo will gain a strong market presence in North America and Latin America, as well as a foothold in Western Europe, to complement its strong, fast-growing smartphone business in emerging markets around the world.” Google revealed in a statement.
The price of the deal will be $2.91 billion. $660 million will be paid in cash, $750 million will be paid with Lenovo shares while the remaining $1.5 billion will be paid in form of a three-year promissory note.
This is Lenovo’s second acquisition in this month after it recently purchased part ofIBM’s server business in a deal worth $2.3 billion. Lenovo has also broken the record for China’s biggest tech deal in the same space of time with this deal representing the biggest Chinese tech deal in history.
The acquisition of such an iconic brand, innovative product portfolio and incredibly talented global team will immediately make Lenovo a strong global competitor in smartphones. We will immediately have the opportunity to become a strong global player in the fast-growing mobile space,” Yang Yuanqing, Chairman and CEO of Lenovo revealed.
Lenovo has the expertise and track record to scale Motorola Mobility into a major player within the Android ecosystem. This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere,” Larry Page, CEO Google revealed in a statement.
There believes that this deal when finalized would make Lenovo the third largest smartphone manufacturer after Samsung and Apple. Presently, Motorola is the third largest Android smartphone manufacturer in the U.S. and the third largest manufacturer in Latin America.
It has also been revealed that Lenovo will retain the Motorola brand name for its smartphones in North America and Latin America while Lenovo will be used in the Chinese market and other developing markets.

Google earlier acquired Motorola Mobility and its patents in 2012 for a price of $12.5 billion.

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