Lenovo completes £1.82bn acquisition of Motorola Mobility

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Motorola brand to remain and operate as wholly-owned subsidiary; Lenovo becomes third largest global smartphone player and sets sights on Apple and Samsung; expects sales of 100 million this year 

Lenovo has completed the £1.82 billion acquisition of Motorola Mobility from Google.

It follows clearance from competition authorities in the US, China, EU, Brazil and Mexico, as well as the Committee on Foreign Investment in the US (CFIUS).

Lenovo will operate Motorola as a wholly-owned subsidiary, with the latter’s headquarters remaining in Chicago. It will also welcome nearly 3,500 global Motorola employees – including 2,800 in the US – who design, engineer, sell and support the manufacturer’s devices.

Google will maintain ownership of a majority of the Motorola patent portfolio, while Motorola will receive a license to this and other intellectual property.

The handset manufacturer will also 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 deal was originally announced on January 30, 2014, with the £1.82 billion fee representing a near £6 billion loss for Google, which had paid £7.54 billion for the handset business from Motorola in 2011.

According to preliminary global smartphone sales figures for Q3 released by analyst firm IDC yesterday (October 29), Xiaomi was the third largest smartphone vendor with 17.3 million shipments and market share of 5.3 per cent.

Lenovo was just behind in fourth, with 16.9 million shipments and market share of 5.2 per cent. The acquisition of Motorola will likely take it above Xiaomi into third position. IDC didn’t list Motorola’s unit shipments or market share as it didn’t feature in the top five manufacturers.

Lenovo chairman and CEO Yang Yuanqing said: “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.

“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.”

Lenovo executive vice president and president of its Mobile Business Group Liu Jun is now chairman of the Motorola Management Board, while Rick Osterloh 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 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.”

 

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