Lenovo buys Motorola from Google for $2.3bn - and just $660m in cash

Google sells Motorola Mobility for just $2.9bn compared with the $12.5bn it paid for it

Lenovo has followed up its $2.3bn purchase of IBM's System X server business by acquiring Motorola Mobility from Google for $2.9bn - a hefty discount on the $12.5bn that Google slapped on the table to buy it in May 2012, less than two years ago.

Indeed, the transaction is structured so that Lenovo will pay just $660m in cash, with the balance comprising $750m in Lenovo stock and a $1.5bn, three-year interest-free promissory note.

It also comes just months after the Beijing-based computer maker was rebuffed in its discrete attempts to buy troubled BlackBerry - its offer rejected by the Canadian government on security grounds. However, the Motorola deal has yet to be approved by either the US or Chinese authorities and could yet be stopped.

The deal will close in the late summer, subject to the various regulatory approvals around the world, including the Antitrust Improvements Act 1976 and CFIUS in the US.

In a blog post, Google CEO Larry Page justified the 2012 purchase of Motorola as an acquisition of intellectual property to protect Android. "We acquired Motorola in 2012 to help supercharge the Android ecosystem by creating a stronger patent portfolio for Google and great smartphones for users," wrote Page.

Google will keep Motorola's Advanced Technology group, including the Project Ara modular phone, as well as its selection of intellectual property from Motorola's patent portfolio.

However, Lenovo will acquire as part of the acquisition a "non-exclusive, royalty-free, worldwide and perpetual license to certain members of the Motorola Mobility Group with respect to the Excluded IP which will not be transferred as part of the Transaction".

The Motorola "team", he added had done a "tremendous job" of "reinventing the company" - despite the fact that it has weighed down Google's own financial results with big quarterly losses.

Since it acquired it, Motorola has been a burden on Google's normally spritely bottom line with net losses since the second quarter coming in at: $199m, $192m, $353m, $271m, $342m and $248m - the fourth quarter results for 2013 have yet to be released.

Under Google's stewardship, costs were cut at Motorola, but the company struggled to ship new smartphones, further depressing already depressed sales.