Motorola, the renowned mobile brand, is now officially under the ownership of the iconic PC brand Lenovo as the Chinese company completed the transition Thursday. The strategic step will favor Lenovo as well as Motorola in their continuous growth in the mobile sector, a much needed push for both tech firms in the Samsung-Apple dominated market.
The terms of the agreement, in which Lemova acquired Motorola from Google, remain unchanged. Lenovo has agreed to pay $2.91 billion to Google. This includes $660 million in cash and $750 million in newly issued Lenovo stock. The remaining $1.5 billion will be paid during a three-year promissory note. The acquisition deal excludes Motorola's worthy patent portfolio, which continues to remain a Google property while Lenovo gets the Motorola's mobile side of the business.
"In Lenovo we have a partner that shares our mission and that brings global scale, a diverse product portfolio and a track record of seizing strategic opportunities and making the most of them," Motorola President and Chief Operating Officer Rick Osterloh, said in a company blog post Thursday. "Together we will go farther, faster. With an impressive portfolio of smartphones, wearables and PCs, our two companies will be uniquely positioned to push the boundaries of choice and value, and bring exciting new experiences to people everywhere."
Lenovo originally announced the deal in January as a move to drive innovation across the Android ecosystem with Motorola's established brand. The reason for Google to offload Motorola was clear. After purchasing the company for $12.5 billion in May 2012, the internet search titan was unable to turn the company's losses. Google recorded a total operating loss of $248 million in the third quarter of 2013. Overall, the web giant managed to land a favorable deal with Lenovo for Motorola Mobility.
Motorola will continue to operate as a wholly owned subsidiary from its Chicago headquarters. Lenovo is planning to add some 3,500 employees across the globe, including 2,800 employees in the U.S., the company said in a press release.
"Today, we achieved a historic milestone for Lenovo and for Motorola - and together we are ready to compete, grow and win in the global smartphone market," Lenovo chairman and chief executive Yang Yuanqing said in a statement, Thursday.
The company is aiming at the number three spot in the global smartphone market, which as of Q3 2014 is held by Xiaomi.
