Chinese electronic company Lenovo have agreed with search engine Google to acquire the Motorola Mobility smartphone business according to a joint statement Wednesday. "The purchase price is approximately US$2.91 billion, including US$1.41 billion paid at close, comprised of US$660 million in cash and US$750 million in Lenovo ordinary shares. The remaining US$1.5 billion will be paid in the form of a three-year promissory note," the statement read. "The deal will immediately make Lenovo a strong global competitor in smartphones," said Yang Yuanqing, chairman and CEO of Lenovo. "We are confident that we can bring together the best of both companies to deliver products customers will love with a strong, growing business." Google had paid $12.5bn for the company less than two years ago. However, Google will maintain ownership of the vast majority of the Motorola Mobility patent portfolio, including current patent applications and invention disclosures.
Larry Page, CEO, Google says that "This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere."
The deal is set to make Chinese Lenovo the U.S. and Latin America's third-largest smartphone maker after Korean Samsung and American Apple and gain a strong market presence there and in Western Europe, according to technology experts.
Lenovo, which in 2005 acquired IBM's PC business and its legendary PC brand, will now take top place in the smartphone market. Lenovo is one of the largest PC makers in the world, with its products including servers, tablets and smart phones.
Lenovo said last week, it would buy IBM's server business for US$2.3 billion
Google's innovations in web search and advertising have made its website a top Internet property and its brand one of the most recognized in the world.