New | China's Lenovo buys Google's Motorola business for US$2.9 billion
Observers hail the move as win-win, as Google gets to keep Motorola patents and Chinese firm can boost its brand recognition
Lenovo Group said on Wednesday that it agreed to buy Google’s Motorola handset division for US$2.91 billion, in what is China’s largest-ever tech deal as Lenovo buys its way into a heavily competitive US handset market dominated by Apple.
It is Lenovo’s second major deal on US soil in a week as the Chinese electronics company angles to get a foothold in major global computing markets.
Lenovo last week said it would buy IBM’s low-end server business for US$2.3 billion. The deal ends Google’s short-lived foray into making consumer mobile devices and marks a pullback from its largest-ever acquisition.
Google paid US$12.5 billion for Motorola in 2012. Under this deal the search giant will keep the majority of Motorola’s mobile patents, numbering around 17,0000, which are considered its prize assets. While Google would be taking a loss on the sale, it did spin off the Motorola Home division for US$2.3 billion in 2012 and sold off some of its manufacturing facilities.
Even under Google, Motorola failed to gain traction in a rapidly evolving smartphone market now dominated by South Korea’s Samsung and US-based Apple.
“Lenovo has the expertise and track record to scale Motorola Mobility into a major player within the Android ecosystem,” Google chief executive Larry Page said in a statement.