Google Sells Motorola Mobility to Lenovo for $2.91B

NEW YORK (TheStreet) --Google (GOOG) is selling its Motorola Mobility business to Lenovo in a deal worth $2.91 billion.

Google CEO Larry Page confirmed the deal in a posting on the company's corporate blog, describing the sale as "an important move" for Android users.

Page added that Google acquired Motorola in 2012 to "help supercharge the Android ecosystem by creating a stronger patent portfolio for Google and great smartphones for users". Nonetheless, the CEO acknowledged the "super competitive" smartphone market, adding that it "helps to be all-in when it comes to making mobile devices."

"It's why we believe that Motorola will be better served by Lenovo-which has a rapidly growing smartphone business and is the largest (and fastest-growing) PC manufacturer in the world," he added. "This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere."

"Lenovo has the expertise and track record to scale Motorola into a major player within the Android ecosystem. They have a lot of experience in hardware, and they have global reach. In addition, Lenovo intends to keep Motorola's distinct brand identity-just as they did when they acquired ThinkPad from IBM in 2005."

But the acquisition should not be seen as a shift away from Google's other hardware efforts, according to the CEO. "The dynamics and maturity of the wearable and home markets, for example, are very different from that of the mobile industry," he said. "We're excited by the opportunities to build amazing new products for users within these emerging ecosystems."

Nonetheless, the deal represents a massive write-down for Google, less than two years after it spent $12.5 billion on Motorola Mobility.

In his blog posting, Page said that Google will retain the vast majority of Motorola's patents, which it will "continue to use to defend the entire Android ecosystem." When it bought the Motorola Mobility business in 2012, Google gained access to a vast, 17,000-strong, trove of technology patents, mostly related to the wireless industry. The deal was rumored to include more than 10,000 mobile communication patents.

Earlier this month Lenovo announced a $2.3 billion deal to acquire IBM's (IBM) low-end x86 server business. The acquisition, however, is expected to receive a lengthy examination from the Treasury Department's Committee for Foreign Investment in U.S. (CFIUS). The inter-agency panel reviews foreign buyers acquisitions of U.S. assets for national security threats.

--Written by James Rogers in New York.

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