Lenovo to Acquire Motorola Mobility from Google For A Cool $2.91B - HotHardware
Lenovo to Acquire Motorola Mobility from Google For A Cool $2.91B

Lenovo to Acquire Motorola Mobility from Google For A Cool $2.91B

Here's one that practically no one saw coming: Motorola Mobility has a new owner. Yes, the company that Google picked up just a couple of years ago for upwards of $12 billion is now under a new umbrella. Lenovo, the world's largest PC vendor, has just picked up one of the most well-known names in mobile. Motorola Mobility was purchased in 2012 largely for the patent portfolio that came along with it. If you'll recall, patent wars were reaching insane heights during those days, and Google wanted to ward off future legal paralysis.


As it turns out, the handset business was a drag for Google, costing it hundreds of millions of dollars each quarter. Even the well-received Moto X and low-cost Moto G weren't enough to turn Motorola around. It makes one wonder if anyone has the muscle to carve away market share from Samsung and Apple. BlackBerry is essentially a nonfactor now, and Google itself couldn't make Motorola a winner.

Lenovo has agreed to pay $2.91 billion for the assets, including $1.41 billion paid at close, comprised of $660 million in cash and $750 million in Lenovo ordinary shares (subject to a share cap/floor). The remaining $1.5 billion will be paid in the form of a three-year promissory note.


Google will keep some of those original patents, but Lenovo picks up the Motorola brand and the mobile portfolio, placing it immediately in a place to compete in the North American market. Google is likely relieved to have a flagging asset off of its books, but it's taking a major loss in order to do so. Strangely, Google stock was up slightly in after-hour trading following the news, signaling that even investors believed that Moto was hopeless in the mobile space.

One has to ask: what company is capable of seriously contending with Samsung and Apple? And who will be brave enough to try?
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If Google is holding on to some of the patents before we can firmly say that they are losing a lot of money we need to find out about those patents first. How much are those patents worth? How much can those patents earn them, or save them, in the next 5-10 years? Will Lenovo be paying Google to use those patents or will they be allowed to use them freely as part of the deal? And how much money did owning motorola mobility and it's patents save them in the last 2 years? Answering these questions might show they aren't taking as big of a loss then just the purchase vs sale prices.

I'm excited for Lenovo and will anxiously wait to see what sort of splash they make in the North American market. Google didn't do much at all with the brand but the little hey did do was interesting and better than anything Motorola itself did. I have a lot of confidence in Lenovo to at least come up with innovative devices. Let's hope the market buys in!

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Google has placed a value on the patents they are keeping of $5.5B. With the earlier sale of parts of Motorola they didn't want and the tax writeoffs they got, Google is losing ~$2B on Motorola if the patents they are keeping are worth $0.

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Infinity; sooooo it's not a loss at all but a gain?

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