Reuters has filed a new report citing its own sources stating that Lenovo is close to purchasing Motorola Mobility from Google for $3 billion, making it a $9 billion loss-making venture for the search giant after originally buying the mobile unit for $12 billion in 2012. Google has subsequently confirmed the purchase on its investor page. The purchase consists of $660 million in cash and $750 million in Lenovo shares, with the remaining $1.5 billion paid in the form of a three-year promissory note.
Google first attempted to leverage Motorola Mobility’s patent portfolio after its purchase in order to defend Android against a spate of litigation from Apple, with no success to speak of, while attempts to reform the mobile hardware division have resulted in the Moto X and recently released Moto G, meant as its re-entry into the wider global market with a high-quality, low-cost Android smartphone.
What is not known is whether Lenovo’s purchase will trigger additional scrutiny from US regulators, being a Chinese company, though its current presence in the US in general PC sales and support would likely lead to less scrutiny than if the deal were led by Huawei or ZTE. Lenovo CEO Yang Yuangqing has also hinted that the Motorola brand will remain in place along with the Moto X and Moto G, and that there will be no layoffs. The Motorola brand will be used in North and South America while Lenovo will continue to use its brand internationally as normal.
What remains to be seen is the state of the current manufacturing capacity in the US, as Lenovo has directly refused to comment on whether it will keep the US plant responsible for Moto Maker and the Moto X, since Lenovo outsources its manufacturing capability for its own smartphones. Lenovo will also get a pool of 2,000 patents from the purchase with Google keeping the remainder from the initial purchase.
