Lenovo Group said on Thursday it has closed the acquisition deal with Google Inc., as the worlds largest personal-computer maker tries to boost global sales, which were surpassed by rival Xiaomi Corp.
Lenovo, which first announced its interest in Motorola in January, plans pull the company above water within the first four to six quarters of the purchase, as it was unprofitable under Googles governance.
The laptop giant will operate its newest purchase as a wholly-owned subsidiary. The company said they will change neither the location of Motorolas headquarters, nor its president, Rick Osterloh, but however, Liu Jun, the head of Lenovo’s mobile business, will become Motorola’s chairman.
Lenovo, first founded in China, bought IBMs PC business in 2005, later took over HP to become the largest PC manufacturer by sales last year. With the acquisition of Motorola, Lenovo seeks to prove itself on the global smartphone market.
The Chinese company increased its global smartphone deliveries by 38% in the third quarter to 16.9 million units, taking fourth place, behind Apple, Samsung and Xiaomi. Lenovos global smartphone market share edged up to 5.2% from 4.7% year-to-year, according to International Data Corp.
“By building a strong number three and a credible challenger to the top two in smartphones, we will give the market something it has needed: choice, competition and a new spark of innovation,” CEO Yang Yuanqing said in the statement.
Lenovo was overtaken in the third-quarter by crosstown rival Xiaomi, which reported more than tripled deliveries to 17.3 million units, taking the third place with 5.3% of the global smartphone market, according to the same research agency. Both Xiaomi and Lenovo are headquartered in Beijing.
Lenovos plans to continue to sell the Motorola brand in the U.S., which could help the company to gain further ground in the states. Mr. Yuanqing said that Lenovo can make use of Motorolas strong relationship with telecommunication carriers to progress in other mature markets.
The deal was valued at $2.91 billion and includes Google to retain significant part of Motorolas patents. Google acquired Motorola back in 2012 at $12.5 billion.
Lenovo Corp. lost 0.17% on Thursday and closed at HKD 11.48 in Hong Kong, marking a one-year increase of 40%. The company is valued at HKD 121.78 billion. According to the Financial Times, the one analyst offering a 12-month price target expects that Lenovo Corp. share price will fall to HKD 18.30 during the next year from the last price of HKD 29.50.
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