Google to take 6 per cent stake in Lenovo
10th Feb 2014 | 13:30
Lenovo investors not so confident
As part of its US$2.91 billion (£1.88 billion) deal to sell Motorola Mobility to Lenovo, Google will take a 6 per cent stake in the Chinese PC manufacturer.
A stock exchange filing last week showed that the search giant will take 618.3 million shares with a total value of $750 million (£460 million)
Google acquired Mobility, the handset manufacturing arm of Motorola, in 2011 for $12.5 billion (£7.5 billion).
Its sale, announced at the end of January, represents a large financial loss, but it is believed that Google retains the, "vast majority of the Motorola patent portfolio," believed to be in the region of 10,000 patents. The patent portfolio is believed to have been the main factor in Google's decision to buy Mobility.
Google's stake in Lenovo puts its money where its mouth is. Following its acquisition of Mobility, CEO Larry Page was bullish about Lenovo's prospects.
"Lenovo has the expertise and track record to scale Motorola Mobility into a major player within the Android ecosystem," said Page. "This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere."
Other investors have been less confident in Lenovo's purchase, however, with the company's share price having dropped by over 23 per cent since the sale was announced. Lenovo is due to announce its latest figures on on February 13th.