Lenovo buying Motorola's handset business from Google for nearly $3 billion (update: confirmed)

According to several sources Lenovo is nearing a rather
stunning deal that would put Motorola's cellphone
business in its back pocket for roughly $3 billion.
Google snatched up Motorola in 2011 for $12.5 billion.

Since then it's slowly broken the company up, scaled
back its device lineup and added its massive pile of
patents to its legal arsenal. Now, after losing money for
several years straight, Mountain View is reportedly
preparing to offload the division on Chinese computer
giant Lenovo. The purchase of Motorola will probably
also put to bed rumors of Lenovo purchasing
BlackBerry... at least for a little while. The company
has been looking to step up its mobile efforts for the
last couple of years, and Motorola's existing
infrastructure, patent library and brand recognition
should help it make a dent here in the US.

The deal hasn't been officially announced yet, but when
(and if) it is There are bound to be plenty of questions.
For one, how will the sale of Motorola to a Chinese
firm affect the company's recent efforts to bring
manufacturing jobs back to the US? And how will this
impact Google's own expanding manufacturing plans in
the future? Or course, we may have also just figured
out how exactly Google convinced Samsung to start
putting more focus on Play Services.

Update: Well, that was quick. Google has confirmed
the deal, which will see Motorola Mobility change
hands for $2.91 billion. Most of that money will be in
the form of cash or a promissory note, but it will also
include roughly $750 million worth of Lenovo shares.
The deal will also cause more than a few cynics to
shout, "I told you so," as Google will be maintaining
ownership of "the vast majority" of Motorola's patents.
Though, the deal does include a license for that
intellectual property and Lenovo will take ownership of
Moto's brand and trademarks.

Google also insists that this will not affect its other
hardware efforts, including those that might involve
wearables and smart home appliances. Though, the tone
of the message seems to indicate that Google will be
staying out of the mobile phone market for the
foreseeable future. An internal memo said that Motorola
would be "better served" by Lenovo in the "super
competitive" smartphone market. The advanced
research unit of the company will be staying in Google's
possession, however, to help with those other hardware
projects.

For Lenovo, the deal means that it is now not only the
largest PC maker, but it will also soon be the third-
largest handset manufacturer in the Americas (not to
mention the second-largest cellphone company in China
as Lenovo). Motorola's existing agreements with
retailers and carriers instantly gives the Chinese
manufacturer a broad reach into mobile markets all over
the globe. The company also expressed confidence in
Moto's existing team, and in the short term, it does not
appear there are plans to close its Chicago headquarters
or start laying off employees, including the executives.
Though, things sound less rosy for employees at the
Texas plant where the Moto X is manufactured. The
company said only that it would do what made sense to
grow the brand, and would not commit to keeping
existing manufacturing jobs in the US. The current plan
appears to be to maintain the Motorola brand where it
enjoys recognition and success.

Via: Engadget