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Google to sell Motorola unit to Lenovo

Deal would mark the Chinese firm's second major acquisition on US soil in a week, as it angles to get a foothold.

Last updated: 29 Jan 2014 23:42
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Lenovo buys the Motorola handset division after Google failed to revamp it, buying it in 2012 for $12.5bn [Reuters]

China's Lenovo Group is said to be in the final stages of buying Google's Motorola handset division for close to $3bn, in what may be the company's leeway into a heavily competitive US handset market dominated by Apple.

If sealed, the deal will give Lenovo control over Google's division that makes the Moto X and Moto G smartphones, as well as certain patents, sources familiar with the matter told Reuters news agency on Wednesday.

A sale of Motorola would mark the end of Google's short-lived foray into making mobile devices and a pullback from its largest-ever acquisition. Google bought the US cellphone giant in 2012 for $12.5bn.

Since then, Google, which is keeping most of the patent's portfolio, has trimmed Motorola's workforce from 20,000 to about 3,800, and the handset division has lost nearly $2bn.

The deal would also mark Lenovo's second major deal on US soil in a week, as it seeks to get a foothold in major global computing markets.

The Chinese electronics company last week announced a deal to buy IBM's low-end server business for $2.3bn in what was China's biggest technology deal thus far. An announcement could come as soon as Wednesday.

The Chinese firm will use a combination of cash and stock as well as deferred payments to finance the deal with Google, the people said, asking not to be named because the matter is not public.

The potential purchaser is being advised by Credit Suisse Group while Lazard advised Google on the transaction, the people said.

Representatives for Google, Lenovo, Credit Suisse and Lazard did not respond to requests for comment or declined to comment.

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