After announcing its intention of acquiring Motorola from Google 10 months ago the Chinese-based Lenovo finally sealed the $2.91 billion deal which is still subject to certain adjustments. The move will surely broaden and diversify Lenovo’s market portfolio and at the same time set the tone for them to compete with the giants in the smartphone industry. A month ago Lenovo had also acquired IBM’s x86 servers to the tune of $2.1 billion.
According to Lenovo the deal includes the US$1.41 billion paid at close (US$660 million in cash and US$750 million in Lenovo ordinary shares which is subject to a share cap/floor). The remaining US$1.5 billion will be paid in the form of a three-year promissory note.
The deal will imply that Lenovo will have its hands full with Motorola’s established product lineup such as the Moto X, Moto G, Moto E and Droid devices. The company said that the deal will also allow them to take ownership of the future Motorola Mobility product roadmap.
Motorola is one of the most popular brands in the mobile phone industry. To date it is the third-ranked smartphone producer in the United States and it also lies in third position in Latin America in terms of overall manufacturer.
Motorola will remain as an independent entity and this is not surprising since the company enjoys hefty product awareness worldwide. Lenovo will welcome a workforce composed of almost 3,500 employees worldwide.
Yang Yuanqing, chairman and CEO, Lenovo quipped, “Today we achieved a historic milestone for Lenovo and for Motorola – and together we are ready to compete, grow and win in the global smartphone market. By building a strong number three and a credible challenger to the top two in smartphones, we will give the market something it has needed: choice, competition and a new spark of innovation.” He also added, “This partnership has always been a perfect fit. Lenovo has a clear strategy, great global scale, and proven operational excellence. Motorola brings a strong presence in the U.S. and other mature markets, great carrier relationships, an iconic brand, a strong IP portfolio and an incredibly talented team. This is a winning combination.”
The CEO of Google Larry Page said, “Motorola is in great hands with Lenovo, a company that’s all-in on making great devices.
Lenovo executive vice president and president of Lenovo’s Mobile Business Group, Liu Jun will act as the chairmanof the Motorola Management Board while seasoned Rick Osterloh, will stay on his position as the president and chief operating officer of Motorola.