Lenovo added a new company to its list after acquiring Google-owned Motorola Mobility smartphone division in a deal valued at $2.91 billion.
Google bought Motorola Mobility in 2012, but was not able to turn the fortunes of the company despite several experiments like attractive smartphones at cheap prices like the Moto X and Moto G. The web giant is offloading the unprofitable Motorola Mobility smartphone division to Chinese PC maker Lenovo for about $2.91 billion, a fraction of what it was purchased for by Google. Google CEO Larry Page officially confirmed the news on the company's blog post, Wednesday.
Lenovo, the world leader in PC manufacturing, will be taking the initiative to supervise the Motorola mobile business and the PC maker's global reach and manufacturing expertise will help the American company to drive innovation across the Android ecosystem.
"This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere," CEO Page said in a blog post. "As a side note, this does not signal a larger shift for our other hardware efforts. The dynamics and maturity of the wearable and home markets, for example, are very different from that of the mobile industry. We're excited by the opportunities to build amazing new products for users within these emerging ecosystems."
Google purchased Motorola Mobility, the smartphone division of Motorola, for $12.5 billion in May 2012. The web giant had a total operating loss of $248 million in the third quarter of 2013. Google's initial interest in Motorola Mobility was for its valuable communications patents, but that did not stop the rivals from winning lawsuits against popular Android platform.
According to Google's Investor Relations site, the deal will be carried out in cash and shares. As a part of the $2.91 billion deal, Lenovo will take ownership of the Motorola brand, existing smartphones like the Moto X and Moto G and the DROIDTM Ultra series and 2,000 patents. Google will keep ownership of a vast patent portfolio and will license them to Lenovo.
In a recent deal about a week ago, Lenovo said that it will buy IBM's x86 server for $2.3 billion, if the U.S. government sends an approval. In 2005, the PC maker acquired IBM's ThinkPad personal computer business for $1.75 billion, overtaking HP and Dell to become the world's largest PC maker.
