Lenovo completes $2.9bn Motorola purchase
Chinese technology firm agrees to acquire mobile manufacturer as Google makes $9.6bn loss
Chinese technology company Lenovo has struck a deal to acquire the mobile arm of Motorola from Google for $2.9bn, becoming the worldâs third-largest smartphone manufacturer.
Under the terms of the deal, which is subject to US regulatory approval, Lenovo will pay $660m in cash and £750m in shares up front, with the remaining $1.5bn paid in installments over three years.
The acquisition comes less than two years after Google agreed to pay $12.5bn for Motorola Mobility, resulting in a loss of approximately $9.6bn.
Google CEO Larry Page addressed the loss in an online newsletter, claiming that a firm needed to be âall-inâ to compete in the âsuper competitiveâ smartphone market.
âItâs why we believe that Motorola will be better served by Lenovo, which has a rapidly growing smartphone business,â Page said.
Critics have accused Motorola of failing to live up to its purchase price having made a $248m loss in Q4 2013, a 29% increase over the $192m loss reported in Q4 2012.
Lenovo CEO Yang Yuanqing has however backed his businessâ ability to turn the business around. âMotorola and Lenovo are competitive in different areas. When the deal closes, we will leverage all the capabilities of each side,â he said.
Google will continue to be involved in the business indirectly by retaining the patents held by Motorola Mobility, but will grant Lenovo licence to access them.
The deal will see Lenovo become the worldâs third-largest smartphone manufacturer behind Samsung and Apple, which produce 29% and 18% of the worldâs smartphones respectively.