Internet search company Google will own a 5.94 percent stake in China's Lenovo Group Ltd worth $750 million once Lenovo's deal to buy Google's Motorola handset division closes, according to a disclosure on the Hong Kong stock exchange.Google
would take 618.3 million Lenovo
shares at $1.213 per share, the stock exchange said late on Thursday.
Lenovo said last week it would acquire the Motorola handset business
, along with some 2,000 patents, for $2.91 billion. That came days after an announcement the company would purchase IBM's low-end server unit
for $2.3 billion.
Lenovo will receive over 2,000 "patent assets" as part of the Motorola transaction, the companies said, but it remains unknown which will change hands and whether they might be subject to extra scrutiny from regulators.
, Lenovo will pay $660 million in cash, $750 million in Lenovo ordinary shares, and another $1.5 billion in the form of a three-year promissory note, Lenovo and Google said in a joint statement.
Google executive chairman Eric Schmidt on Monday expressed confidence that Lenovo would gain approval from U.S. regulators to buy Google's Motorola smartphone hardware business in what would be China's biggest technology acquisition to date.
Schmidt said he saw "a good chance" of the deal passing muster with the Committee on Foreign Investment in the United States, or CFIUS, which monitors acquisitions by overseas corporations.
Speaking at a dinner organized by the Cato Institute think tank, Schmidt said Lenovo's experience buying IBM's ailing personal computer division in 2005 would stand it in good stead as it seeks the green light to acquire the Motorola business.
"There's a good chance of it being OK," Schmidt said, adding, "We would not have done the transaction if we thought it would be in trouble."
The deals will be reviewed by CFIUS
to ensure they do not threaten national security.
Lenovo's $2.91 billion acquisition is being called China's largest-ever tech deal, with the company looking to buy its way into a heavily competitive U.S. handset market dominated by Apple.
The purchase will give Lenovo a beach-head to compete against Apple and Samsung Electronics as well as increasingly aggressive Chinese smartphone makers in the highly lucrative U.S. arena.
The deal ends Google's short-lived foray into making consumer mobile devices and marks a pullback from its largest-ever acquisition. Google paid $12.5 billion for Motorola in 2012
. Under this deal the search giant will keep the majority of Motorola's mobile patents, considered its prize assets.
Written with inputs from Reuters