Lenovo to buy Motorola from Google for US$3 billion

Google has confirmed that Lenovo will buy Motorola Mobility for a deal totalling US$2.9 billion, including the company's smartphone portfolio and some patents.

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2 min read

Google has confirmed that Lenovo will buy Motorola Mobility for a deal totalling US$2.9 billion, including some patents.

The Moto X. (Credit: Sarah Tew/CNET)

The deal was detailed by Google in an official release. For US$2.91 billion, Lenovo will receive Motorola's portfolio of devices such as the Moto X and Moto G, over 2000 patents, the Motorola Mobility trademarks and product roadmap. Google will hold on to most of the patents in Motorola Mobility's current portfolio.

That $US2.91 billion amount is made up of US$660 million in cash, US$750 million in Lenovo shares and US$1.5 billion in a three-year promissory note.

Lenovo will acquire Motorola in a bargain deal compared to the US$12.5 billion that Google paid for the company in 2012. Motorola's patents and associated intellectual property were of value to Google who used them to "create a level playing field" for Android, according to Google CEO Larry Page.

"But the smartphone market is super competitive, and to thrive it helps to be all-in when it comes to making mobile devices," he continued. "It's why we believe that Motorola will be better served by Lenovo — which has a rapidly growing smartphone business and is the largest (and fastest-growing) PC manufacturer in the world. This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere."

According to IDC, Lenovo is the world's biggest PC vendor, with 17 per cent market share. The acquisition of Motorola will see the Chinese company make a solid push into the smartphone market on a global scale. In the fourth quarter of 2012, Lenovo had a 4.7 per cent share of the global smartphone market, as detailed in statistics released by Strategy Analytics. This ranks Lenovo as the number five vendor of smartphones globally.

"The acquisition of such an iconic brand, innovative product portfolio and incredibly talented global team will immediately make Lenovo a strong global competitor in smartphones," said Lenovo CEO Yang Yuanqing.

Previous high-profile acquisitions by Lenovo include the Think brand from IBM, which helped the company become the major player in PCs on a consumer and business scale.

"In addition, Lenovo intends to keep Motorola's distinct brand identity — just as they did when they acquired ThinkPad from IBM in 2005," said Page.

The sale is subject to regulatory approval in the US and China.