Lenovo will buy Motorola for $2.91 billion in a mixture of cash and stock. Google will retain ownership of the vast majority of Motorola's patents, while 2,000...
patents and a license on the remaining patents will go to Lenovo. Lenovo will pay Google $660 million in cash, $750 million in stock, with the remaining $1.5 billion paid out over the next three years.GOOGLE BELIEVES LENOVO CAN TURN MOTOROLA INTO "A MAJOR PLAYER WITHIN THE ANDROID ECOSYSTEM."
"Lenovo has the expertise and track record to scale Motorola Mobility into a major player within the Android ecosystem," Google CEO Larry Page says 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."
Google initially bought Motorola Mobility for $12.5 billion back in 2012, but it said at the time that it was mainly interested in the company's patent portfolio. Now, Google is offloading its subsidiary's handset business, which has been losing hundreds of millions each quarter since the purchase. Google previously sold off Motorola's set-top box unit for over $2 billion.
Though patents are a large part of what drew Google's interest to Motorola in the first place, those patents haven't been as helpful as Google initially hoped. Google appears to have highly overvalued Motorola's portfolio, which hasn't been able to bring in nearly as much in royalties as either company seemingly expected.
Lenovo has been vocal about its intention to move into the US market this year. Though it hasn't actively pushed its own devices in the United States, it did make a bid for BlackBerry late last year. Though its offer was blocked, picking up Motorola's device unit could give it an even stronger start. It would mark Lenovo's second acquisition announcement this month: just last week it announce that it reached a deal to buy IBM's x86 server business.
Lenovo has experience in taking an established brand and building upon it. It purchased its ThinkPad business from IBM in 2005, and has gone on to create a continually successful line of laptops. Lenovo is likely hoping to do the same with Motorola, which has consistently built strong devices but has often struggled against competitors with more marketing muscle.
News of Lenovo's acquisition of Motorola comes just a day before Google reports its quarterly earnings. Investors have been interested to know what Google plans to do about Motorola's mounting losses. Tomorrow may not deliver them good news from the previous quarter, but it appears Google has given its final answer.
Source:http://www.theverge.com/2014/1/29/5358620/lenovo-reportedly-buying-motorola-mobility-from-google
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