Google Profits Billions With Motorola Sale To Lenovo, Keeps Patents

[EbookReader]

http://www.forbes.com/sites/jeanbap...s-with-motorola-sale-to-lenovo-keeps-patents/

However, on the bright side, when Google acquired Motorola it also inherited a cash pile of $3.2 billion, as well as $2.4 billion in deferred tax assets, for a net acquisition cost of $6.9 billion.

Google then sold Motorola’s set-top box business to Arris Group ($2.3 billion) and its factories to Flextronics ($75 million), further reducing the total acquisition cost to $3.85 billion.

Net-net, after the Lenovo deal closes, Google spent less than a billion dollars for patents that it originally estimated was worth $5.5 billion. Admittedly, Motorola also ran up close to $2 billion in operating losses, but that still leaves Google with a $3 billion profit!

Slashgear had an article which broke down just how much money Google lost on the Motorola deal, and surprisingly its not that much.

12.4B purchase price
- 2.9B cash acquired from Motorola
- 2.4B Motorola deferred tax asset
-2.35B sale of set-top box division to Arris
- 75M sale of Motorola's China and Brazil operations to Flextronics
-2.91B sale of Motorola to Lenovo
+1.2B Motorola operating losses

Grand Total: 2.29B

So basically Google paid $2.29B for Motorola's best patents and their Advanced Technology and Projects group.

 

[EbookReader]

http://dealbook.nytimes.com/2014/01...nal-motorola-deal/?_php=true&_type=blogs&_r=0

When Google bought Motorola, the hardware maker had about $3 billion in cash on hand and nearly $1 billion in tax credits. So that brings the original deal’s effective price down to about $8.5 billion.

Then, Google sold Motorola’s set-top box business to Arris for nearly $2.4 billion. That lowers the effective price to roughly $6.1 billion.

Now, Google is selling Motorola Mobility — primarily the handset business, along with a few patents — for $2.9 billion. So we’re at about $3.2 billion.

It’s worth noting a few more things. In a regulatory filing in 2012, Google disclosed that it valued Motorola’s overall “patents and developed technology” at about $5.5 billion.

Under the terms of the deal announced on Wednesday, Google will hold onto the bulk of Motorola Mobility’s patents. By comparison, the group of companies like Apple Inc. and Microsoft that bought Nortel Networks‘ patents out of bankruptcy paid about $4.5 billion in total. So Google got a pretty good deal.

 

[maflynn]

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