Google invests $750M in Lenovo as part of Motorola deal
Web giant buys 5.94 percent stake in Lenovo as part of its $2.91 billion to unload its Motorola unit.
(Credit: Google)
Google has already completed one of its obligations in its proposed sale of Motorola Mobility to Lenovo.
The Web giant bought a 5.94 percent stake in the Chinese electronics maker for $750 million last week, according to a disclosure to the Hong Kong stock exchange noted by Reuters. Google acquired 618.3 million shares of Lenovo at $1.213 per share on January 30, according to the report.
The investment is apparently part of Google's $2.91 billion deal to sell to sell Motorola Mobility to Lenovo, which was announced a day earlier on January 29. In addition to $660 million in cash, Google plans to pay $1.5 billion in the form of a three-year promissory note.
In addition to the Motorola brand and its portfolio of devices, Lenovo will also receive more than 2,000 patent assets, while Google will retain control of a majority of the patents it originally obtained when it acquired Motorola several years ago.
While Google likely benefited initially from investor sentiment that Lenovo overpaid for the unit, the value of its investment has already slipped. Lenovo's stock price declined 8.2 percent the day the sale was announced and another 14 percent on Tuesday morning, the first trading day after the Chinese New Year holidays.
The deal should get a green light from US regulators, but the company will likely have to agree to certain concessions in the name of US national security. The purchase still faces a review by the Committee on Foreign Investment in the United States (CFIUS), a federal agency that looks out for potential US national security issues.
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