Motorola's retreat continues, sells factories in China and Brazil to Flextronics for $75 million
Mere hours after Motorola announced that it was pulling out of South Korea, it's revealed a deal to sell its Chinese and Brazilian operations to Flextronics for $75 million. We won't blame you if you've not heard of the manufacturer, which has previously built XBox and Zune units for Microsoft as well as Kodak's digital cameras. While the stack of cash will go straight to plug the hole in Motorola's coffers, Flextronics has also bought first dibs on future smartphone production, something that CEO Mike McNamara says could be worth "several billions" in revenue down the line -- hopefully the next time Larry utters the words "Motorola" and "Nexus" in the same sentence.
Update: Motorola Mobility exec Frank Meng says that the 7,000 workers at the firm's Tianjin, China operation won't lose their jobs during the hand-off to Flextronics. In addition, a Motorola spokesperson told The Next Web that the company plans on transferring "all in-scope employees and contractors" to Flextronics. How's that for job security?
Show full PR text
Flextronics and Motorola Mobility Partner to Streamline Supply Chain Operations
SINGAPORE and LIBERTYVILLE, Ill., Dec. 10, 2012 /PRNewswire via COMTEX/ --Flextronics (NASDAQ: FLEX) and Motorola Mobility LLC, owned by Google, announced today that the companies have signed a definitive agreement, under which Flextronics will acquire Motorola's manufacturing operations in Tianjin, China, and will also assume the management and operation of its Jaguariuna, Brazil, facility. Employees and assets at both locations will transfer to Flextronics after the transaction closes. The agreement also includes a manufacturing and services agreement for Android and other mobile devices. The companies expect to complete closing activities by the first half of 2013, subject to customary closing conditions including regulatory approvals. Financial terms of the agreement are not being disclosed.
"We are very pleased to announce today's agreement and expand our long-standing collaborative and successful relationship with Motorola Mobility," said Mike McNamara, chief executive officer, Flextronics. "We look forward to leveraging our extensive manufacturing expertise and supply chain solutions to provide Motorola Mobility with increased value."
"The agreement with Flextronics is an important step forward for us in transforming our overall supply chain into a competitive advantage for Motorola Mobility. Flextronics has been our partner for many years, and their expertise and experience in manufacturing will enable us to focus on other areas of the supply chain where we can add the most value," said Mark Randall, senior vice president, supply-chain and operations for Motorola Mobility LLC.
A conference call hosted by Flextronics's management will be held tomorrow, December 11, at 5:00 a.m. (PT) / 8:00 a.m. (ET) to discuss today's announcement. The conference call will be broadcast via the Internet and may be accessed by logging on to the Company's website at www.flextronics.com. Additional information in the form of a slide presentation may also be found on the Company's site. A replay of the broadcast will remain available on the Company's website afterwards.
