China’s Lenovo has announced that it has bought over Google’s Motorola handset division for US$2.91bn
The deal is reportedly China’s largest-ever tech deal, according to Reuters.
Yang Yuanqing, chief executive of Lenovo, said, “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.”
This move is Lenovo’s second major deal after it said it would buy IBM’s low-end server business for US$2.3bn last week.
In the deal for the Motorola handset business, Lenovo will pay US$660mn in cash, US$750mn in Lenovo ordinary shares, and another US$1.5bn in the form of a three-year promissory note, Lenovo and Google said in a joint statement.
Google had bought Motorola for US$12.5bn in 2012.
Under the present deal, Google will keep the majority of Motorola’s mobile patents. The purchase is expected to give Lenovo an edge to compete against Apple and Samsung Electronics as well as increasingly aggressive Chinese smartphone makers.
Analyst Frank Gillett, Forrester Research said, “Motorola has not been shooting the lights out with designs or sales volumes in smartphones. So the value is simply in brand recognition to achieve market recognition faster — and to expand the design and marketing team with talent experienced at US and Western markets.”
However, the deal is yet to be approved by both the US and Chinese authorities.
