Dennis Woodside, the chief executive officer of Motorola Mobility, will be joining Dropbox, a private cloud storage company to serve as chief operating officer. Woodside is leaving prior to the closing of the deal between Lenovo Group Limited (OTCMKTS:LNVGY) (HKG:0992) and Google Inc (NASDAQ:GOOG).
Jonathan Rosenberg, former senior vice president of product management at Google Inc (NASDAQ:GOOG) will be named as chief operating officer of Motorola Mobility. He will be overseeing the daily operations of the company, according to Reuters based on information from a source familiar with the situation.
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The source also stated that Nikesh Arora, the current executive chairman of the board of Motorola Mobility will remain in his position, and will continue to supervise its strategy.
Lenovo absolutely committed to buy Motorola
Lenovo Group Limited (OTCMKTS:LNVGY) (HKG:0992) told Reuters that it has knowledge about the departure of Woodside, and expressed its commitment in acquiring Motorola Mobility. In an e-mailed statement, the Chinese company said, “We are aware of this change, but we are absolutely committed to this acquisition, and remain completely confident in the Google and Motorola leadership team,”
Last month, Lenovo Group Limited (OTCMKTS:LNVGY) (HKG:0992) agreed to acquire Motorola Mobility from Google Inc (NASDAQ:GOOG) for $2.91 billion. Under the agreement, the Chinese company will pay the search engine giant $1.41 billion in the form of $660 million cash and $750 million worth of ordinary shares of Lenovo at the close of the transaction, and the remaining $1.51 billion will be paid in the form of three-year promissory note.
Concerns over Lenovo’s acquisition strategy
The shareholders of Lenovo Group Limited (OTCMKTS:LNVGY) (HKG:0992) demonstrated their concern over the acquisition strategy of the company. Since the announcement of its deal with Google Inc (NASDAQ:GOOG), the stock price of Lenovo declined 11%. Analysts opined that it might face challenges in turning around Motorola Mobility.
Building two pillars of growth
Lenovo CEO Yang Yuanqing emphasized that the company’s latest acquisitions—Motorola Mobility and low-end servers of International Business Machines Corp. (NYSE:IBM) is part of its strategy to build two pillars of growth (smartphone & tablet being the first pillar and enterprise business as the second pillar) for the next decade.
Third largest smartphone manufacturer
Yuangqing recently stated that Lenovo Group Limited (OTCMKTS:LNVGY) (HKG:0992) aims to become the third largest smartphone manufacturer globally during a conference call with journalist. He maintained his position that the company will benefit from acquiring Motorola Mobility. He said, “We will become the number three smartphone player in the world. With the combined business of Motorola smartphone and Lenovo smartphone, we will have much larger scale.”
He added, “We have made a lot of acquisitions before. We know how to manage the integration and products, how to manage the challenge and the risk.”