Mobile Phones Guide
Google Sells Motorola Mobility to Lenovo for US$2.91 Billion
Google has just announced that it is selling Motorola Mobility to Lenovo for US$2.91 billion.
Google states that the deal is yet to be approved in the U.S or China and this process will takes time. It remains to be seen whether the U.S government will approve a sale of its home grown company to the Chinese PC and smartphone maker. Google also confirmed earlier reports that it acquired Motorola for its patents.
Larry Page, CEO of Google:
We acquired Motorola in 2012 to help supercharge the Android ecosystem by creating a stronger patent portfolio for Google and great smartphones for users.
Despite the sale of Motorola to Lenovo, Google states that it will be retaining the vast majority of Motorola's patents which it "will continue to use to defend the entire Android ecosystem."
Google claims that Motorola will be better served by Lenovo, a company that has tremendous experience in hardware and a global reach while it can focus on "driving innovation across the Android ecosystem.
Lenovo has the expertise and track record to scale Motorola into a major player within the Android ecosystem: they have a lot of experience in hardware and they have global reach. In addition, Lenovo intends to keep Motorola’s distinct brand identity–just as they did when they acquired ThinkPad from IBM in 2005.
Lenovo also issued a press release confirming the agreement with Google to acquire Motorola. The acquisition is expected to boost its position in the smartphone market as it has more access to the markets in North and Latin America.
Lenovo (HKSE: 992) (ADR: LNVGY) and Google (NASDAQ: GOOG) 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 is making a huge loss with this transaction as it acquired Motorola for US$12.5 billion (unless the Motorola patents that Google is keeping are really worth US$9.5 billion). Interestingly, the sale of Motorola comes a few days after Samsung entered into a patent cross-licensing agreement with Google to work closely for more innovation.