News by Luke Jones on Thursday October 30, 2014.
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Despite recently becoming more closely linked than ever, Motorola has finally been sold off by Google to Lenovo, months after the deal was first announced. In the deal, Google will retain Motorola's patents, although the company can license them even though it is now under Chinese company Lenovo's wing.Recently Google launched the Motorola built Nexus 6, so the companies remained linked to each other, while Motorola's standalone hardware is perhaps the most respectful third party Android skin, offering a near stock experience. How hands on Lenovo will get with Motorola depends, but hopefully the company will let the Moto company get on with what it has been doing. Motorola issued the following statement today:
Today, Motorola Mobility becomes part of the Lenovo family of companies, and we are thrilled. Over the past two years we have transformed Motorola by focusing on what matters most - consumers. We've made huge strides in bringing the mobile Internet to millions of people around the world and improving their lives through exceptional technology, experiences and value. While we're proud of the progress we've made, we recognize that there is still much more we can achieve - in innovation, reach and impact. In Lenovo we have a partner that shares our mission and that brings global scale, a diverse product portfolio and a track record of seizing strategic opportunities and making the most of them. Together we will go farther, faster. With an impressive portfolio of smartphones, wearables and PCs, our two companies will be uniquely positioned to push the boundaries of choice and value, and bring exciting new experiences to people everywhere. As excited as we are about what's changing, we're also pleased with what we are carrying forward with us. We will be a wholly owned subsidiary of Lenovo and remain headquartered in Chicago's Merchandise Mart while maintaining offices around the world, including in Silicon Valley. The iconic Motorola brand will continue, as will the Moto and DROID franchises that have propelled our growth over the past year. We will continue to focus on pure Android and fast upgrades, and remain committed to developing technology to solve real consumer problems. And we will continue to develop mobile devices that bring people unprecedented choice, value and quality. Motorola is a company that has long helped to define the course of the mobile telecommunications and mobile computing industries. With Lenovo backing us, we look forward to being able to reshape the industry for decades to come. We're ready for the challenge and hope you?ll join us on the journey.As for Lenovo, the company told me before IFA that it will be using Motorola to further its brand name in western markets. In other words, Motorola will be used as Lenovo?s western division, so it could be possible that we see Lenovo handsets rebranded under the Moto name. The Chinese heavyweight issued its own press release to confirm the news. The company's deal means that it is now the third largest smartphone manufacturer in the world and plans to sell 100 million handsets in 2015. Despite recent progress, Motorola is not actually a profitable company, but Lenovo says it will get the Moto brand in the black within 4 to 6 quarters.
Lenovo (HKSE: 992) (ADR: LNVGY) and Google (NASDAQ: GOOG) announced today that Lenovo's acquisition of Motorola Mobility from Google is complete. The acquisition of the Motorola brand and Motorola's portfolio of innovative smartphones like Moto X, Moto G, Moto E and the DROIDTM series, as well as the future Motorola product roadmap, positions Lenovo as the world's third largest maker of smartphones. Lenovo will operate Motorola as a wholly-owned subsidiary. Motorola's headquarters will remain in Chicago. With the completion of the acquisition, Lenovo welcomes the addition of a new portfolio company with nearly 3,500 employees around the world - including about 2,800 in the U.S. - who design, engineer, sell and support Motorola's outstanding devices. "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," said Yang Yuanqing, chairman and CEO, Lenovo. "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." "Motorola is in great hands with Lenovo, a company that's all-in on making great devices," said Larry Page, CEO, Google. Liu Jun, Lenovo executive vice president and president of Lenovo's Mobile Business Group, is chairman of the Motorola Management Board. Rick Osterloh, a Motorola veteran, will remain president and chief operating officer of Motorola. "Motorola has already built solid momentum in the market, and their recent results show consumers are excited about their exceptional products that stand out for their design and simplicity," said Liu Jun. "With the complementary strengths of our two companies, we expect to sell more than 100 million mobile devices this year - including smartphones and tablets - by leveraging the Lenovo brand's leading market position in China, our shared momentum in emerging markets, and Motorola's strong foothold in mature markets like the U.S." Motorola already has strong momentum in the marketplace led by highly successful new product launches and groundbreaking innovations, which have provided solid growth. Beyond smartphones, the Moto 360 watch has captured consumer attention and established Motorola as a company expanding into emerging mobile device areas. As previously stated, Lenovo expects to make the Motorola business profitable in four to six quarters. Google will maintain ownership of a majority of the Motorola Mobility patent portfolio, while Motorola will receive a license to this rich portfolio of patents and other intellectual property. Motorola will retain over 2,000 patent assets and a large number of patent cross-license agreements, as well as the Motorola Mobility brand and trademark portfolio. The total purchase price at close was approximately US$2.91 billion (subject to certain post-close adjustments), including approximately US$660 million in cash and 519,107,215 newly issued ordinary shares of Lenovo stock, with an aggregate value of US$750 million, representing about 4.7 percent of Lenovo's shares outstanding, which were transferred to Google at close. The remaining US$1.5 billion will be paid to Google by Lenovo in the form of a three-year promissory note. A separate cash compensation of approximately US$228 million was paid by Lenovo to Google primarily for the cash and working capital held by Motorola at the time of close. The transaction has satisfied all regulatory requirements and customary closing conditions, including clearance by competition authorities in the U.S., China, EU, Brazil and Mexico, and by the Committee on Foreign Investment in the United States (CFIUS). This is the fifth time since 2005 Lenovo has been cleared by CFIUS to acquire a U.S. business. source: Motorola/Lenovo
Luke Jones is the Managing Editor at MobileBurn.com and is the person you need to speak to about the content on the site. Luke studied creative writing at degree level before carving out a reputation as a freelance tech writer. He settled here at MobileBurn, where he reviews devices and contributes to the news, as well as overseeing the site's content and direction.