Mobile blockbuster – Lenovo said ready to buy Motorola from Google for $3b

January 29, 2014
6
5 1

The $3 billion deal, reported by Reuters, could be officially announced as soon as today. 

The Chinese firm will use a combination of cash and stock as well as deferred payments to finance the deal with Google, according to the news service's sources.

The purchase of Motorla would give Lenovo a way to instantly be a player in the competitive smartphone market in the U.S. and fill out its computer portfolio which already includes PCs, laptops and tablets. IDC recently ranked Lenovo the number one PC supplier in the world with a 16.7% share of the global market. 

The deal would also free Google from any questions as to whether it favors Motorola over other hardware partners with inside information (something Google has consistently denied). Google bought Motorola in 2011 for $12.5 billion.

Analyst Jack Gold of J.Gold & Associates thinks the deal is a win win for both companies.

"It gets Google out of channel conflict. Gets them out of a business they don’t have a chance of making any real money in, and gets them the ability to concentrate on real opportunities without the diversion of having to run a device manufacturing company," said Gold. As for Lenovo: 

"At $3 billion (a relative bargain) Lenovo is amassing its acquisitions to be a full line player, and it is has HP (and to a lesser extent Dell) directly in its sites (IBM could be next)."

Comments

Load More