Motorola Sold By Google To Lenovo For $3 Billion
Gabriel Roşu / 3 years ago
Google is apparently selling Motorola Mobility to Chinese manufacturer Lenovo for a deal that will get Google $3 billion. No specific details have been released on the ongoing deal, but it is said we are to know more soon enough.
Google has bought Motorola Mobility back in 2011 for as $12.5 billion. The deal was made mostly for Motorola’s patents and to have a cellphone maker at its back to improve Google’s mobile business. Motorola has been losing money, and the Moto X did not sell as well as expected.
“Lenovo has the expertise and track record to scale Motorola Mobility into a major player within the Android ecosystem,” Larry Page, Google co-founder, said in a statement. “This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere.”
On the other side, Lenovo seems to be building a comprehensive business in simple computers. Last week, Lenovo paid $2.3 billion for a big part the computer server business of IBM which got 7.5 percent of he world market for low-margin servers based on off the shelf semiconductors. Lenovo may hope to build an economy of scale by buying chips for both PCs and servers in even greater bulk.
“We will immediately have the opportunity to become a strong global player in the fast-growing mobile space,” Yang Yuanqing, Lenovo’s chief executive, said in a statement. “We are confident that we can bring together the best of both companies to deliver products customers will love and a strong, growing business.”
Google is said to receive $660 million in cash, $750 million worth of Lenovo shares and a three-year promissory note worth $1.5 billion. People close to Lenovo say they believe the deal will win approval from the Committee on Foreign Investment in the United States. Credit Suisse is reportedly advising Lenovo, while Lazard is sticking with Google.