MOUNTAIN VIEW, Calif., Jan. 30 (UPI) -- U.S. Internet giant Google Inc. said China's Lenovo Group Ltd. agreed to buy its Motorola Mobility smartphone unit in a $2.91 billion deal.
Google, which has its headquarters in Mountain View, Calif., said on its website Lenovo already has a strong personal computer presence and a fast-growing smartphone business, and the latest deal will allow it to gain a "strong market presence in North America and Latin America, as well as a foothold in Western Europe."
The purchase comes immediately in the wake of the Chinese electronics firm's announcement to buy IBM's x86 server business for $2.3 billion. Lenovo had acquired IBM's PC unit eight years ago.
Google reportedly had paid about $12.5 billion in 2011 to acquire Motorola Mobility.
Google said the definitive agreement calls for $660 million in cash and $750 million in Lenovo ordinary shares paid at the close of the deal. The remaining $1.5 billion will be in the form of a three-year promissory note.
The announcement said Google will retain a majority of Motorola Mobility's patent portfolio, with Lenovo receiving a license to the intellectual property.
The New York Times said the sale of Motorola will not be a total loss for Google as it will retain billions of dollars' worth of patents and essentially make Lenovo into a factory for its Android operating system.
Google said Motorola Mobility enjoys outstanding brand awareness around the world, and is currently the No. 3 Android smartphone manufacturer in the United States and in Latin America.
"The acquisition of such an iconic brand, innovative product portfolio and incredibly talented global team will immediately make Lenovo a strong global competitor in smartphones," Lenovo Chairman and Chief Executive Officer Yang Yuanqing said.
Google CEO Larry Page said: "Lenovo has the expertise and track record to scale Motorola Mobility into a major player within the Android ecosystem. This move will enable Google to devote our energy to driving innovation across the Android ecosystem, for the benefit of smartphone users everywhere."
The $34 billion Lenovo serves customers in more than 160 countries and has major research centers in Yamato, Japan; Beijing, Shanghai and Shenzhen, China; and Raleigh, N.C.
China Daily, quoting analysts, reported Thursday the purchase will give Lenovo advantage in exploring the global tablet and smartphone markets.
"Motorola will enable Lenovo to close the gap between Apple Inc. and Samsung Electronics Co. in the mobile intelligent devices sector," Antonio Wang at the IDC China's client system research department, told China Daily. "The acquisition will help Lenovo clinch the position as the third-largest smartphone vendor worldwide."