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October 31, 2014

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Lenovo’s Motorola buyout done

LENOVO Group yesterday announced the completion of its acquisition of Motorola Mobility from Google in a US$2.9 billion deal — a move by the world’s biggest personal-computer maker to expand its business beyond the PC market.

Regulators from China, the United States and Europe gave their approvals for the sale.

Lenovo got the rights to the Motorola brand and its portfolio of smartphones. Lenovo will operate Motorola as a wholly owned subsidiary. Its headquarters will remain in Chicago. Nearly 3,500 Motorola employees, including about 2,800 in the US, will join Lenovo.

Google, which acquired Motorola Mobility in 2011 for US$12.5 billion, will maintain the ownership of a majority of the Motorola Mobility patent portfolio, while Motorola will receive a license to the portfolio of patents and other intellectual property.

Motorola will retain over 2,000 patent assets, a large number of patent cross-license agreements, and brand and trademark portfolio.

“This partnership has always been a perfect fit,” said Yang Yuanqing, Lenovo’s chairman and CEO, who equated Lenovo’s global scale and proven operational excellence with Motorola’s strong presence in the US market, an iconic brand and a strong IP portfolio.

Lenovo hopes the merger will help it challenge market leaders Samsung and Apple. It also expects to make Motorola profitable in four to six quarters. “Motorola is in great hands with Lenovo, a company that’s all-in on making great devices,” Larry Page, Google’s CEO, said in a statement.

In the second quarter, Lenovo’s net profit grew 23 percent year on year to US$214 million, and revenue jumped 18 percent to US$10.4 billion. It sold more smartphones than PCs for the first time ever.




 

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