Lenovo and Google are reportedly close to signing a deal that’ll transfer ownership of handset maker Motorola to the Chinese technology company. News of the pending acquisition comes from China Daily and Reuters. According to sources, the deal will be worth between $2 and 3 billion and will be financed through a combination of cash, stock and deferred payments. It reportedly will include the handset operations as well as 10,000 patents owned by Motorola. The acquisition is expected to be publicly announced as early as Wednesday or Thursday.
It’ll be a significant financial loss for Google as the company acquired Motorola in 2011 for $12.5 billion. Google sold Motorola’s cable set top box division to Arris for $2.3b and the subsequent sale of Motorola to Lenovo for $3 would leave Google with a $7.2 billion loss.
Google may be cutting its quarterly losses by kicking Motorola to the curb so soon after acquiring the company. It was no secret that the handset maker was a money-losing subsidiary for the search giant. The latest quarterly earnings (Q3 2013) showing an operating loss of $248 million from the division, which is even greater than the $192 million loss reported in the year-ago quarter.
Details on the Lenovo transaction and its effect on the company’s North American operations should be announced in the coming days.
Update: Google confirmed the Lenovo acquisition in a press release on its investor’s website. Google will sell Motorola for $2.91 billion, including US$660 million in cash, US$750 million in Lenovo ordinary shares and US$1.5 billion to be paid in the form of a three-year promissory note. Google will keep most of Motorola’s patent portfolio. Lenovo will receive licenses to the these patents. It also will receive 2,000 patent assets, the Motorola brand and trademark portfolio.