Lenovo completes $2.9 bn Motorola acquisition from Google

Lenovo retail shop in Delhi

Chinese devices makers Lenovo today said it completed the $2.91 billion Motorola Mobility deal with Google.

By acquiring the loss making Motorola Mobility, Lenovo will become the third largest smartphone vendor.

Lenovo said the acquisition of the Motorola brand and smartphones like Moto X, Moto G, Moto E and the DROID series, as well as the future Motorola product roadmap, positions Lenovo as the world’s third largest maker of smartphones.

Following the deal, Google will have about 4.7 percent stake in Lenovo.

Lenovo will retain Motorola brand.

Lenovo retail shop in Delhi
Lenovo will operate Motorola as a wholly-owned subsidiary. Motorola’s headquarters will remain in Chicago. Lenovo will absorb nearly 3,500 employees around the world – including about 2,800 in the U.S.

This indicates that Lenovo is not eliminating any job. According to Google website, Motorola Mobile had 3,466 employees till September 2014.

Microsoft started sacking employees after acquiring the Nokia phone business for $7.2 billion.

Yang Yuanqing, chairman and CEO, Lenovo, said: “Motorola brings a strong presence in the U.S. and other mature markets, great carrier relationships and a strong IP portfolio.”

“Motorola is in great hands with Lenovo, a company that’s all-in on making great devices,” said Larry Page, CEO of Google.

Liu Jun, Lenovo executive vice president and president of Lenovo’s Mobile Business Group, is chairman of the Motorola Management Board. Rick Osterloh, a Motorola veteran, will remain president and chief operating officer of Motorola.

“We expect to sell more than 100 million mobile devices this year including smartphones and tablets  by leveraging the Lenovo market position in China, our shared momentum in emerging markets, and Motorola’s strong foothold in mature markets like the U.S,” Liu Jun said.

Lenovo expects to make the Motorola business profitable in four to six quarters.

Google will maintain ownership of a majority of Motorola Mobility patent portfolio, while Motorola will receive a license to this rich portfolio of patents and other intellectual property.  Motorola will retain over 2,000 patent assets and a large number of patent cross-license agreements, as well as the Motorola Mobility brand and trademark portfolio.

Google on 16 October said Motorola Mobile segment revenue for the third quarter of 2014 was $1.69 billion, $26 million lower.

Net loss from Motorola Mobile in the third quarter of 2014 was $185 million, compared to $193 million in the third quarter of 2013.

Google acquires Motorola

On May 22, 2012, Google announced the acquisition of Motorola Mobility for $40 per share in cash.

In two years, Google sold Motorola to Lenovo after buying the company for more than $10 billion.

At the time of the acquisition, Google said the acquisition will enable the search engine giant to supercharge the Android ecosystem and will enhance competition in mobile computing. Motorola Mobility will remain a licensee of Android and Android will remain open. Google will run Motorola Mobility as a separate business.

Larry Page, CEO of Google, said: “Motorola is a great American tech company, with a track record of over 80 years of innovation. It’s a great time to be in the mobile business, and I’m confident that the team at Motorola will be creating the next generation of mobile devices that will improve lives for years to come.”

Anand B
[email protected]