Search engine giant will complete deal upon completion of Motorola Mobility sale
Google is set to acquire around six percent of Lenovo as part of the deal which resulted in the sale of Motorola Mobility to the Chinese company.
According to a filing on the Hong Kong stock exchange, Google will acquire 618.3 million Lenovo shares at $1.21 each, amounting to a $750 million investment equivalent to 5.94 percent of the company. However, the deal will only be completed once the Motorola sale goes through.
The rest of the acquisition deal will see Lenovo will pay $660 million in cash and the remaining $1.5 billion over the next three years. Under the terms of the agreement, Google, will keep the patents it acquired when it bought Motorola for $12.5 billion in 2012, while Lenovo will receive more than 2,000 patent assets in addition to the Motorola brand and its portfolio of devices.
Larry Page, Google CEO, says the company’s acquisition of the patents was important for the Android platform, but says the Google’s inability to devote all of its resources to smartphone development would hinder Motorola’s prospects in a “super competitive” market.
Lenovo, currently the fifth largest smartphone manufacturer in the world, hopes the acquisition will boost its presence outside China, where it currently sees the majority of its sales.
The company had long been linked with a move for a western manufacturer to boost its global profile, and prior to its acquisition of Motorola Mobility had apparently tried to purchase BlackBerry.
The takeover has been funded by Lenovo’s position as the world’s largest PC manufacturer, with the company accounting for 18.1 percent of all shipments worldwide. Recently, the company has looked to assert this leading market position by purchasing IBM’s x86 server business for $2.3 billion (£1.4bn), but it denied earlier this week that it was in talks to buy Sony’s struggling VAIO PC product line.
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