Lenovo to reportedly buy Google's Motorola Mobility for $2.9 billion [update: confirmed]
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."
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.
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."
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.
Comments
Perhaps they should have Googled what they were worth before purchasing?
Is this or is this not AppleInsider?
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..
AHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAH
So ... Google traded Motorola Mobility (paid 12.5B) for a thermostat company.
Ouch.
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.
What a fail, LOLz
They wouldn't be Android manufacturers if they weren't losing money and happy about it.
AHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAH
I agree. I was LOL'ing the second I read this on The Verge.
They should sell it for ? billion dollars.
What was Eric Schmidt's bit about "adult supervision no longer required"?
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.
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.
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?
Googs wastes 12.5 billion and has a negative ROI on Moto: stock up.
Apple makes money hand over fist: stock drops.
Perfect sense!
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.
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?
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.