It’s a big news that would have taken by surprise all the tech pundits. Lenovo buys the Motorola from Google for $2.91 billion. 19 months back Google completed the Motorola acquisition largely eyeing the vast patent repository for a huge $12.5 billion dollar. For Google, the new acquisition did not fare well nor did the acquired patents helped the company much as expected. With billions bleeding and Motorola cellphone division not able to get back into good health in-spite of new launches, Google might have thought of cutting losses and focus at what is is best at i.e, concentrate on the Android ecosystem and software development rather than getting distracted with the hardware division.
For Lenovo it has a proven track record for turning a division into successful business. After acquiring the IBM consumer PC, it turned the ThinkPad brand highly successful and is now world’s largest PC maker. By acquiring Motorola, Lenovo would bag approximately 2,000 patent assets as well as the trademark and copyright to use the Motorola brand name. It has to be noted that Lenovo is already fourth largest smartphone company in the world inspite of not entering the US and European markets so far. The Motorola acquisition gives a headway to the company to enter the US markets and also make good use of the brand visibility.
Lenovo will pay Google $1.41 billion at the time of closing the deal which will be in the form of $660 million in cash and about $750 million in Lenovo shares. The remaining $1.5 billion will be paid in the form of a three-year promissory note.