Lenovo has been making the headlines with their recent acquisition of Motorola Mobility from Google for $2.91 billion. Needless to say, investors in Lenovo are somewhat concerned given Google’s posted loses with the company since its acquisition, but Lenovo’s Chief Executive Yang Yuanqing and Chief Financial Officer Wong Waiming took part in an interview with the Wall Street Journal.
On the topic of turning around an unprofitable business, Yang said that they have already identified areas where they can cut expenses due to the significant economies of scale that the Motorola acquisition will give Lenovo.
When we complete the acquisition, from day one, we can start working on those cost synergies. Most likely it will take a couple of quarters to turn around the Motorola business. But I definitely believe we can have a profitable business over time.
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Yang was also very vocal in stating that they plan to fully utilise the Motorola brand to build more products and take advantage of Lenovo’s vast operational resources.
Lenovo seem very confident that they can turn Motorola’s steep losses around and keep it from hurting the Lenovo brand.
For the short term, it could have a certain negative impact on our performance. But for the long term, I think this acquisition will be good for our shareholders and for the future of Lenovo.
Lenovo seem to know what they’re doing here, and despite investors not being completely comfortable with their vision, the CEO and CFO certainly seem to know how they will utilise Motorola.
Let us know your thoughts in the comments below – is it a good acquisition for Lenovo?