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Lenovo buys Motorola from Google for $2.91 billion

Posted on 30/01/2014 by David Petrik

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Today Google announced that it will sell Motorola Mobility to Lenovo for $2.91 billion dollars in a mixture of cash and stocks.

Lenovo is set to pay Google $660 million in cash $750 million in Stocks while the remaining $1.5 billion will be paid over a 3 year period. Google will hold onto some 2000 patents from Motorola and keep its tech research and development team and related projects includes Project Aria, the new modular device system. The team of about 100 will be moved to the Google headquarters in Mountain View California and integrated as a special team into the Android OS department.

“Lenovo has the expertise and track record to scale Motorola Mobility into a major player within the Android ecosystem,” Google CEO Larry Page said 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.”

Lenovo believes that with the acquisition of Motorola they will finally be able to make a presences for themselves in the booming smartphone market in America and Europe, something they haven’t been able to do under the Lenovo name.

People may be asking why Google would part with Motorola so quickly, but the original reason for the purchase was for patents that they believed would help protect them against any patent infringements against competitor companies like Apple and Microsoft.

Some suggest that the sale of Motorola could have been influenced by the recently signed 10 year service agreement signed by Google and Samsung. As you may have guessed, Samsung owns around a whopping 42% (as of May 2013) of the Android smartphone market. This makes it a powerful force for Google to join with.

Both Lenovo and Google have high expectations for Motorola coming out of the acquisition. Motorola said the acquisition will help it to achieve the rapid growth it’s looking for. “With the recent launches of Moto X and Moto G, we have tremendous momentum right now and Lenovo’s hardware expertise and global reach will only help to accelerate this,” Motorola CEO Dennis Woodside said in a statement.

Source: Business InsiderThe Verge