Lenovo Said Near $3 Billion Deal to Buy Google’s Motorola

Jan 29, 2014 4:36 pm ET

(Updates with Lenovo details in second paragraph.)

Jan. 29 (Bloomberg) -- Lenovo Group Ltd. is near an agreement to acquire Google Inc.’s Motorola Mobility handset unit for about $3 billion, according to person with knowledge of the matter, as the Chinese personal-computer maker continues a buying spree of U.S. companies.

The sale may be announced today, the person said, asking not to be identified as the information is private. Officials at Lenovo and Google didn’t immediately reply to requests for comment on the sale, which was first reported by China Daily.

A deal would follow Lenovo’s agreement to purchase International Business Machine Corp.’s low-end server unit for $2.3 billion earlier this month. In 2005, Lenovo also bought IBM’s PC division. The company has been looking to counter falling industry shipments by expanding storage equipment and the servers that run corporate networks.

A sale would let Google shed a handset business it acquired for $12.4 billion in 2012. Buying Motorola pushed the Mountain View, California-based Internet search company into hardware after 14 years in which Web advertising accounted for almost all of its revenue. It also gave Google ownership to 17,000 patents to protect devices running its Android mobile operating system in legal disputes with competitors. Google later sold part of Motorola’s set-top box business to Arris Group Inc.

Even as Google has invested in Motorola, results have been disappointing. Motorola’s third-quarter revenue fell 34 percent, even as the company began selling Moto X, the first smartphone introduced under the direction of Google’s eadership.

--Editors: Pui-Wing Tam, Mohammed Hadi