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