Lenovo finalizes acquisition of Motorola from Google
The smartphone market has been booming for years, with more and more developments in the software technology making it possible to communicate in new and exciting ways. Some of the major players—Google, Samsung, Apple and HTC—have been making moves to acquire some of their smaller or less profitable counterparts in order to solidify themselves in the market.
Earlier this year, it was announced that Lenovo Group would complete its acquisition of Motorola from Google in late October. The $2.91 billion deal intended to help strengthen Lenovo's position in emerging markets and grow its presence in established ones. For Lenovo, the merger with Motorola is intended to fend off some of the threat posed by competitor Xiaomi, which recently emerged as the third-largest smartphone provider in the global marketplace.
According to Market Realist contributor, Puneet Sikka, "Google initially bought Motorola Mobility for $12.5 billion in 2012, its largest acquisition to date. Google's main objective in acquiring Motorola was to obtain ownership of its huge trove of patents. It would use these patents to legally protect Android against the likes of Apple Inc. and Microsoft Corporation. And despite Motorola's sale to Lenovo, Google kept these patents to itself."
Since Google took over Motorola in 2012, the media giant has worked to tone down the scope that the latter operates on. Google made a lean company out of Motorola, maintaining just a few product lines that have primary focuses in new markets.
This large-scale technology merger is set to change the landscape of the smartphone and hardware services market in the coming years. While these types of mergers are becoming more and more common, there is a lot of planning and processing that goes into the decision.
If you are planning your own acquisition and expand your offerings, be sure to contact an M&A advisor to discuss your options.