BREAKING NEWS: Lenovo Buys Motorola, Cut Price $2.9 Bn

Written by Oonagh Reidy     30/01/2014 | 09:36 | Category: PHONES

Google flog Moto to the Chinese for US $2.91 billion - or around 25% of what Google paid for it, 19 months ago

BREAKING NEWS: Lenovo Buys Motorola, Cut Price $2.9 Bn

Google CEO Larry Page confirms Lenovo will acquire the Motorola Mobility smartphone unit for about $2.91 billion.

The deal comes just 19 months after Google purchased struggling Motorola for $12.4bn in 2012, meaning Lenovo, now the world's biggest PC maker, paid just one quarter of what Google coughed up for it. 

Motorola has been losing considerable amounts of money, of late, and appears to have failed to keep up with rivals Samsung, or Apple.

Page said: "We acquired Motorola in 2012 to help supercharge the Android ecosystem by creating a stronger patent portfolio for Google and great smartphones for users.

Over the past 19 months, Dennis Woodside and the Motorola team have done a tremendous job reinventing the company. They've focused on building a smaller number of great (and great value) smartphones that consumers love. Both the Moto G and the Moto X are doing really well." 

"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." 

The deal will enable Google to devote more energy to the Android ecosystem. 

However, Page insisted the deal "does not signal a larger shift for our other hardware efforts. The dynamics and maturity of the wearable and home markets, for example, are very different from that of the mobile industry."

Lenovo CEO Per Yang Yuanqing, said he is "confident we will be successful with this process, and that our companies will not only maintain our current momentum in the market, but also build a strong foundation for the future."

"Lenovo has a proven track record of successfully embracing and strengthening great brands - as we did with IBM's Think brand - and smoothly and efficiently integrating companies around-the-world. "

Google will maintain ownership of the vast majority of the Motorola Mobility patents, including current applications and invention disclosures. 

The deal has yet to be approved in the U.S or China. 

This is not the only major purchase Lenovo made this month - it also bought IBM x86 server unit for $2.3 bn, last week.

The company, had previously been tipped to purchase BlackBerry, recorded profits of $220 m in Q2 - up 36%, and has publicly said it aims to ramp up its smartphone  business.

It is currently among the top 5 smartphone vendors, globally. 

Shares rose in both Lenovo, and Google, after the announcement.