Google is selling Motorola Mobility to
Lenovo, giving the Chinese smartphone
manufacturer a major presence in the US
market. 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.
"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.
source: thinkdigit.com
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