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.
“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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Lenovo acquires Motorola Mobility from Google in its second big coup of the month