Google will sell Motorola to Lenovo for $2.91 Billion in cash and stocks

Google CEO Larry Page and Lenovo CEO Yang YuanqingIn a move that surprised everybody, Google announced that Motorola will be sold to Lenovo for $2.91 Billion in cash and stocks.

On Google Blog, Larry Page said that “this move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere.”

In my oppinion Google sold Motorola for two reasons: they failed to take advantage of Motorola patent portfolio or the plans they had with Motorola as smartphone company failed to reach their expectations.

In May 2012 the deal between Google and Motorola Mobility was official for $12.5 billion and the main reason behind that acquisition was the to get more than 17,000 important patents. Now, according to Google, Lenovo will pay $1.41 billion when the acquisition will be approved in cash($660 million) and $750 million in Lenovo ordinary shares. The rest of $1.5 billion will be paid in the form of a three-year promissory note.

The good news is that Motorola is on good hands with Lenovo, said Larry Page:

Lenovo has the expertise and track record to scale Motorola into a major player within the Android ecosystem. They have a lot of experience in hardware and they have global reach. In addition, Lenovo intends to keep Motorola’s distinct brand identity–just as they did when they acquired ThinkPad from IBM in 2005.

Yang Yuanqing, chairman and CEO of Lenovo said:

We are confident that we can bring together the best of both companies to deliver products customers will love and a strong, growing business. Lenovo has a proven track record of successfully embracing and strengthening great brands – as we did with IBM’s Think brand – and smoothly and efficiently integrating companies around-the-world. I am confident we will be successful with this process, and that our companies will not only maintain our current momentum in the market, but also build a strong foundation for the future.

Honestly, I really think that Lenovo can put Motorola back on track just like they did with IBM’s Think brand. Motorola has an enormous potential, but I think we only have to wait and see how innovative will become the M brand under Lenovo.

From IDC report published yesterday we find out that Lenovo was the fifth worldwide smartphone vendor after Samsung, Apple, Huawei and LG with 45.5 million smartphones shipped across the world. With China in one hand and the rest of the world in the other hand this deal might look promising.

Source: Google Blog, Motorola Blog, Google Investor

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