Reports indicate late yesterday that Google has sold Motorola Mobility to Lenovo for $2.91 billion. Broken down, the deal looks more like this: $660 million cash, $750 million of Lenovo shares, and $1.5 billion paid in the form of a three-year promissory note. The sale was confirmed by this post on the company's Investor Relations page.
Lenovo has positioned itself as the largest computer manufacturer in the world, but has struggled to break into the U.S. mobile market. Google, on the other hand, has worked its way up to become a dominating force in the industry. When the struggling Motorola Mobility was purchased by Google for $12.5 billion back in 2012, it came as a bit of a surprise to investors and consumers who assumed Motorola's patents were at the heart of the transaction. Under Google's corporate umbrella, however, the company put out only two smartphones: the Moto X and Moto G. Unfortunately, neither the critically acclaimed high-end Moto X nor the cost-friendly Moto G have brought in much in terms of sales and Google's profits continually sagged.
Many are calling the Motorola acquisition the worst investment in Google's history as they continue to make moves indicating a push into technology hardware. The company recently bought out smart thermostat makers, Nest, for $3.2 billion and robotics/engineering company Boston Dynamics for $500 million. Off-loading Motorola seems counterintuitive to the trend, but they financial burden it has placed on Google may very well be worth it. After the announcement, Google's shares increased 2.6% to $1,136.
Lenovo, who now owns the entire fleet of Motorola handsets and over 2,000 patents, has stated they have no intentions of further downsizing Motorola or moving production of the Moto X (the first smartphone built in the USA) from its Fort Worth, TX home.