Google to Buy Motorola Mobility for $12.5B

Google Inc. and Motorola Mobility Holdings, Inc. have entered into a definitive agreement under which Google will acquire Motorola Mobility for $40.00 per share in cash, or a total of about $12.5 billion, a premium of 63% to the closing price of Motorola Mobility shares on Friday, August 12, 2011. The transaction was unanimously approved by the boards of directors of both companies.

 

The acquisition of Motorola Mobility, a dedicated Android partner, will enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing. Motorola Mobility will remain a licensee of Android and Android will remain open. Google will run Motorola Mobility as a separate business.

 

The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the US, the European Union and other jurisdictions, and the approval of Motorola Mobility’s stockholders. The transaction is expected to close by the end of 2011 or early 2012

 
UPDATE:

In a Google blog posted on Monday, August 15, Larry Page CEO for Google wrote: “Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies,” a point that was stressed later in the day by David Drummond, Google’s senior vice president and chief legal office during an investors’ relation call.

 

“I think we've said for some time that we need to build our patent portfolio to make sure that Android and other businesses can be successful. So we will continue to do that,” he said.

 

According to Motorola Mobility’s chairman and CEO, Sanjay Jha, the company currently has more than 17,000 issued patents worldwide and more than 7,500 patent applications in process.

 

“We have tremendous strength not only in wireless standards but also wireless non-essential patents which are the patents which are required to deliver competitive products in the marketplace,” said Jha. “And as a result of the combination of these patents we believe we'll be able to provide much better support to the businesses at Motorola Mobility as well as support the Android ecosystem.”

 

Page also revealed that the acquisition will give Google, “an opportunity to accelerate innovation in the home business by working together with the cable and telco industry as we go through a transition to Internet protocol.”