In 2011, Google bought Motorola for $12.5 billion, and now it is selling Motorola Mobility to the Chinese smartphone manufacturer, Lenovo, for $2.91 billion. $1.41 billion will be paid at the closing of the deal in cash and ordinary shares, while the remaining $1.5 billion will be paid in the form of a three-year promissory note.
Google will keep the majority of the Motorola patent portfolio, but Lenovo will acquire around 2000 patents plus the Motorola Mobility brand and trademarks. The company will also receive a license for the rest of the portfolio.
Despite launching the fairly successful Moto G and Moto X last year, Motorola Mobility didn’t stop losing money – just last quarter they lost $248 million and, according to rumours, Google’s been meaning to sell Motorola for quite some time now.
Lenovo has been looking to expand its focus on mobile devices and purchasing Motorola, #3 smartphone manufacturer in the US, should greatly benefit the company.
Lenovo, the world’s largest PC shipper and the third largest computer maker, acquired IBM’s personal computer division for $1.25 billion in 2005, and overtook HP in the last months of 2013. Last week, the company announced its plan to buy IBM’s x86 server business for $2.3 billion.
Google has not been successful with Motorola, but maybe Lenovo will have more luck.