The fourth largest smartphone maker, Lenovo, has entered into a definitive agreement with Google to acquire the Motorola Mobility smartphone business. Lenovo is one of the most popular companies on the market, with strong PC business and a huge growing smartphone business. With this agreement, Lenovo will significantly strengthen its position on the smartphone market. Without a doubt, Lenovo will gain a strong market presence in Latina America, North America and Western Europe.
The acquisition price is approximately 2.90 billion dollars. 1.42 billion dollars are paid when closing the contract, featuring 670 million dollars in cash and 740 million in Lenovo ordinary shares. The remaining of 1.4 billion dollars will be paid in a three-year promissory note.
This is not the first time when Lenovo makes an important acquisition. The popular company bought IBM’s PC business in 2005 and also its legendary PC brand. Now it seems that Lenovo has managed to make another important purchase, as Motorola is also a world-renowned name and it has an important value on the market. Motorola Mobility has an interesting portfolio, with innovative smartphones, such as Moto G, Moto X and the DROIDTM Ultra Series. Along with the ownership, Lenovo will get the Motorola Mobility product roadmap.
Motorola will still be led by President and Chief Operating Office Rick Osterloh and will continue to operate from Chicago. “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,” Osterloh declared in a blog post. The firm said that “merging these two firms next year will not be as easy as many expect.”
Lenovo has a strong reputation as being the number one PC manufacturer on the globe. Unfortunately, Motorola does not have the best reputation in the smartphone business. Still, with this acquisition, Motorola gives Lenovo a recognizable brand in several developed markets, such as the US. Motorola also has strong relationships with the wireless carriers. Over the last three months, the company has unveiled several strong products, including Moto G, Moto X, the Nexus 6 for Google and also the debut of the Droid Turbo for Verizon Wireless.