Lenovo to reportedly buy Google's Motorola Mobility for $2.9 billion [update: confirmed]

Posted:
in General Discussion edited February 2014
According to multiple reports on Wednesday, Google is nearing a deal to unload Motorola Mobility to Lenovo for some $2.91 billion less than two years after the Internet giant bought the handset maker for $12.5 billion in 2012.

Update: Google CEO Larry Page has issued a statement confirming Lenovo's acquisition of Motorola Mobility for $2.91 billion.

"But the smartphone market is super competitive, and to thrive it helps to be all-in when it comes to making mobile devices," Page writes. "It's why we believe that Motorola will be better served by Lenovo--which has a rapidly growing smartphone business and is the largest (and fastest-growing) PC manufacturer in the world."

Lenovorola


Citing people familiar with the matter, Reuters reports Lenovo is in the final stages of wrapping up the $3 billion purchase Google's struggling handset division, a move that would forge inroads into the lucrative U.S. smartphone market. Sources have independently confirmed the deal to Bloomberg and TechCrunch.

The report claims Lenovo will use cash, stock and deferred payments to finance the acquisition. In 2012, Google purchased Motorola for $12.5 billion and allowed the company to continue operating under its own branding. Subsequent Motorola releases have seen lackluster performance, including the flagship Moto X lineup.

When Google made the Motorola buy in 2012, some speculated the acquisition was fueled at least in part by American telecom's patent cache. A subsequent statement from Motorola confirmed that Google will be hanging on to a "vast majority" of patents, including pending patent applications and invention disclosures. Lenovo will receive over 2,000 patents in the deal and has the option to license additional properties from the portfolio directly from Google.

Currently, Lenovo is not a major player in the U.S. smartphone game, but the Chinese firm is making strides in burgeoning markets where mid-tier handset sales are booming. A recent report from research firm Strategy Analytics saw Lenovo's global smartphone shipments hit 13.6 million units during the three months ending in December, up from 9.2 million in 2012. Playing a significant role in the company's success is its relatively low-cost offerings.
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Comments

  • Reply 1 of 219
    gtrgtr Posts: 3,231member
    LOL

    Perhaps they should have Googled what they were worth before purchasing?
  • Reply 2 of 219
    jungmarkjungmark Posts: 6,705member
    Haha. Great ROI. Where's Googleguy?
  • Reply 3 of 219
    irelandireland Posts: 17,616member

    Is this or is this not AppleInsider?

  • Reply 4 of 219
    Quote:

    Originally Posted by sog35 View Post

     

    And Google is up $12 from this news after hours.

     

    WTF.




    Which should tell people something about using Mr. Market to judge how well a company is doing..

  • Reply 5 of 219

    AHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAH

  • Reply 6 of 219
    Let's see what this really means. Will the entirety of the GOOG purchase be unloaded, or just parts like the handset, set-top box, or patent portfolio assets, etc.? If it's all being sold for an outright $9.5 billion loss, shareholders should (but won't) demand heads roll.
  • Reply 7 of 219
    I assume Google is keeping some patents or something before offloading it.
  • Reply 8 of 219
    Funny, because the Nest acquisition was about the same (200M more expensive).

    So ... Google traded Motorola Mobility (paid 12.5B) for a thermostat company.

    Ouch.
  • Reply 9 of 219

    If Lenovo can turn around Motorola like they did IBM's personal computer/laptop business, they are going to become a big player in the US market. Samsung better watch out.

  • Reply 10 of 219

    What a fail, LOLz

  • Reply 11 of 219
    jkichlinejkichline Posts: 1,336member

    They wouldn't be Android manufacturers if they weren't losing money and happy about it.

  • Reply 12 of 219
    Quote:

    Originally Posted by Tallest Skil View Post

     

    AHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAH


     

    I agree. I was LOL'ing the second I read this on The Verge.

  • Reply 13 of 219
    john.bjohn.b Posts: 2,720member

    <img class=" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />

     

    They should sell it for ? billion dollars. ;)

     

    What was Eric Schmidt's bit about "adult supervision no longer required"? 

     

     

  • Reply 14 of 219
    gatorguygatorguy Posts: 20,732member
    I didn't think it was a very smart purchase in the first place, and thought the subsequent sell-off of the set-top box division was perhaps a mistake too even tho they got about $2.4B for it. If this story actually has some truth to it I don't know I'd consider this one any smarter even if they're keeping the IP. My initial guess is there's something else, or at least in addition, at play. Then again I'm hardly more qualified than Google execs at deciding what's best for the company. They've managed to make a little money in spite of themselves. :D

    Obviously the rumor details are a bit scant at the moment if there's any fire with the smoke to begin with. Pretty interesting supposition tho.
  • Reply 15 of 219
    Quote:

    Originally Posted by manicakes View Post



    Funny, because the Nest acquisition was about the same (200M more expensive).



    So ... Google traded Motorola Mobility (paid 12.5B) for a thermostat company.



    Ouch.

     

    The thing about companies with more money than business sense... They will soon be shed of both.

  • Reply 16 of 219
    Quote:

    Originally Posted by sog35 View Post

     

    Google up $26 now after hours

     

    Step 1: overpay for a company by several BILLIONS of dollars

    Step 2: lose a Billion dollars every year operating the company

    Step 3: sell the company for a multi billion loss

    Step 4: profit

     

    WTF


     

    Now do you feel better about Apple?

  • Reply 17 of 219
    jungmarkjungmark Posts: 6,705member
    Amazon barely makes money: stock up.
    Googs wastes 12.5 billion and has a negative ROI on Moto: stock up.
    Apple makes money hand over fist: stock drops.

    Perfect sense!
  • Reply 18 of 219
    Wow. Talk about an utterly shameless lack of strategy.

    Quite predictable, but pathetic nonetheless. As a signal of management quality, this should have sent the stock into a tailspin. But apparently it's Opposite Week.
  • Reply 19 of 219
    tundraboytundraboy Posts: 1,617member

    Ha ha ha!  That's the Google way of making money.  They probably figured it's a good deal because it almost pays for the Nest Labs acquisition.  As I once posted, is Google's board made up completely of poodles feeding out of Larry's, Sergei's and Eric's hands?

  • Reply 20 of 219
    Quote:

    Originally Posted by anantksundaram View Post



    Wow. Talk about an utterly shameless lack of strategy.



    Quite predictable, but pathetic nonetheless. As a signal of management quality, this should have sent the stock into a tailspin. But apparently it's Opposite Week.

     

    Bizarro World.

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