Google Inc (NASDAQ:GOOG) purchased a 5.94% stake in Chinese Lenovo Group Limited (ADR) (OTCMKTS:LNVGY) (HKG:0992) Ltd last month totaling to $750 million, according to a disclosure on the Hong-Kong stock exchange made on January 30. Google Inc (NASDAQ:GOOG) acquired 618.3 million shares of Lenovo at $1.213 per share on January 30, says a report from Reuters.

Google Inc GOOG

Purchase of stock by Google was actually a part of the deal announced last week, but it was discovered by media only recently.

Lenovo expect to increase Moto brand sales

The Lenovo / Google Inc (NASDAQ:GOOG) deal has yet to gain approval from both US and Chinese authorities. At the time of announcement of the deal, the Chinese PC maker said that the brand, sales channel and patent portfolio of Motorola would allow the company to expand globally its smartphone business, including immediate market share in the United States and Latin America in addition to Lenovo’s topmost position in China, at present.

According to Lenovo, Motorola has a strong product portfolio with handsets like Moto X, Moto G and other models. However, the company posted a huge loss of $248 million in the third quarter of 2013 due to decline in revenue. The Chinese PC maker is confident that it would be able to increase the sales Moto brand smartphone, compared to 2013, when it was managed by Google Inc (NASDAQ:GOOG). The turnover of Moto mobility had come down approximately 50% from $9.5 billion, in 2011, when Motorola was still an independent company.

Lenovo Google deal not so cheap

When compared to Microsoft Corporation (NASDAQ:MSFT)’s acquisition of Nokia’s handset business, the Lenovo-Google Inc (NASDAQ:GOOG) is not very cheap, says a report from Nomura Global Markets Research analysts Leping Huang, David Hao and Zhuoran Wang. The $1 billion would be assigned for the right to use Motorola mobility patents portfolio because Microsoft paid $2.1 billion to Nokia for 10 years non-exclusive license of its patent portfolio. For the smartphone OEM business remaining $1.91 billion value, which suggests a 0.41x price to sales which is more than 0.32x P/S of Nokia’s handset business unit. According to the analysts the higher P/S may be due to the value of the Motorola brand, which is not part of the Microsoft-Nokia deal.