News: Google is selling Motorola Mobility to Lenovo, just giving the Chinese smartphone manufacturer a major presence in the US market. Lenovo bought it for almost $3billion ($2.91).
Google in less than three years after picking it up, selling Motorola’s mobile division to Lenovo for just $2.91 billion, according to a report from China Daily.
Why? When Google paid a cool $12.5 billion for smartphone and tablet arm of Motorola back in August 2011, the general belief was that the whole thing was more of a pay for patents that it was about selling devices. Today, the Motorola brand is becoming identical with smartphones that are high quality and generous specification without breaking the treasury.
Google said that Motorola was a “natural fit” for two companies and that it would “supercharge the entire Android ecosystem”. The deal was said to include 10,000 of Motorola Mobility’s patents, although it is likely that Google will retain licenses for those patents.
The deal goes out like this: Lenovo will pay cold cash to Google up front, which equates to $660 million, along with $750 million in stock, while the rest of the $1.5 billion will be paid out in the coming three years.
“Lenovo Group Ltd is likely to buy Google Inc’s Motorola Mobility business, giving the Chinese company a bigger say in the global tablet and smartphone market.
The acquisition, worth at least $2 billion, will include more than 10,000 mobile communications patents currently held by the United States company, according to a person familiar with the matter.
The deal is expected to be announced on Thursday morning in Beijing.”
Reason to sell: Google’s Motorola Mobility subsidiary has been a money loser for the company in recent quarters, costing the firm $248 million in the most recent quarter. Earlier this month, the search giant purchased the Tony Fadell-Founded Nest for $3.2 billion in cash.
UpdateX 1: Google has confirmed the acquisition in a blog post, saying “Motorola will be better served by Lenovo”. The deal will need to be approved by both the U.S. and Chinese governments.
“This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere. As a side note, this does not signal a larger shift for our other hardware efforts. The dynamics and maturity of the wearable and home markets, for example, are very different from that of the mobile industry. We’re excited by the opportunities to build amazing new products for users within these emerging ecosystems.”
What do you think of the deal?