Business Merger Between Lenovo And Motorola Mobility

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Business Combination between Lenovo and Motorola Mobility Details of company acquired Lenovo is a Chinese multinational computer technology company operating in more than 60 countries and selling its products in around 160 countries. Motorola, an American company, focus on making cell phones and other electronics. In recent years, Motorola has experienced a bad financial situation and in 2011 Motorola split into two separate companies, Motorola Mobility and Motorola Solutions. In August 2011, Google acquired Motorola Mobility using about US$12.5 billion. In 2014, October 30, Lenovo announced that they have already finished the acquisition of Motorola Mobility from Google and they will operate the Motorola as a wholly-owned subsidiary. Lenovo paid Google about US$2.9 billion to complete this transaction which included approximately US$660 million in cash and US$750 million ordinary stock issued by Lenovo. The remaining US$1.5 billion will be paid to Google by using three-year promissory note. In this paper, we just consider the transaction between Lenovo and Motorola Mobility. Allocation of acquisition differential (see Exhibit 1) The purchase consideration paid for 100% of Motorola Mobility was $3.09 billion, including cash paid, consideration shares, deferred consideration and share-based compensation obligation assumed by the company. The acquisition differential is therefore $1.224 billion. We calculated it by finding the difference between the purchase

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