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Google to buy Motorola Mobility in $12.5 billion deal

Written by James Delahunty (Google+) @ 15 Aug 2011 7:54 User comments (11)

Google to buy Motorola Mobility in $12.5 billion deal Search giant agrees to buy Android partner for $40 a share.
Google Inc. and Motorola Mobility Holdings, Inc. announced this morning that Google will acquire its Android partner in a deal worth $12.5 billion. The board and directors of both firms unanimously approved the deal, which will see Google paying $40 a share, a 63% premium over the closing price of Motorola Mobility on Friday, August 12.

Motorola Mobility will remain a licensee of the Android operating system, and Google has said that the OS will remain open. It will run Motorola Mobility as a separate business. The deal is subject to shareholder approval, and will require some regulatory approval in the United States, the European Union and elsewhere.

The deal is expected to close by the end of the year, or possibly early 2012.

Larry Page, Chief Executive Officer, Google Inc.
"Motorola Mobility's total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers."

Sanjay Jha, Chief Executive Officer, Motorola Mobility.
"This transaction offers significant value for Motorola Mobility's stockholders and provides compelling new opportunities for our employees, customers, and partners around the world. We have shared a productive partnership with Google to advance the Android platform, and now through this combination we will be able to do even more to innovate and deliver outstanding mobility solutions across our mobile devices and home businesses."

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11 user comments

115.8.2011 9:44

Don't forget Motorola has $3 billion in cash, so the deal is really $9.5 billion. Should be decent deal if the patents help them protect Android.


215.8.2011 10:51
oappi
Inactive

@DVDBack23
i thought they only bought mobile division from motorola not whole motorola and thus wont get $3b, or am i missing something?

315.8.2011 10:58

Google should be the ones trying to get T-Mobile. Then they would be doing something.

This message has been edited since its posting. Latest edit was made on 15 Aug 2011 @ 10:59

415.8.2011 10:59

Originally posted by oappi:
@DVDBack23
i thought they only bought mobile division from motorola not whole motorola and thus wont get $3b, or am i missing something?
Motorola Mobility has $3 billion in cash, Motorola Solutions (the half Google didn't buy, has over $6 billion in cash). Separate entities. Spun off last year since the company as a whole was having focus problems.

515.8.2011 13:32
oappi
Inactive

@DVDBack23
Oh thanks for clarifying that =)

It is going to be interesting to see how google buying motorola is going to affect rest of the android device manufacturers, like samsung and htc.

If you ask me buying nokia would have been wiser choise. They still have big market share, good brand, it is very cheap and has a lot of patents that would be useful against apple and ms. Not to mention kill windows phone in the process (at the moment wp has 1.6% market share, but nokia going for wp might bring it alive a bit).

615.8.2011 13:50

Originally posted by oappi:
@DVDBack23
Oh thanks for clarifying that =)

It is going to be interesting to see how google buying motorola is going to affect rest of the android device manufacturers, like samsung and htc.

If you ask me buying nokia would have been wiser choise. They still have big market share, good brand, it is very cheap and has a lot of patents that would be useful against apple and ms. Not to mention kill windows phone in the process (at the moment wp has 1.6% market share, but nokia going for wp might bring it alive a bit).
No problem. In regards to your Nokia statement, while it of course would have made some sense, it would not have come cheap. Any bid for Nokia (even now) would need to be in the $25 billion range, which makes it not really worth it since Google could probably buy every patent they need for less than that :)

In terms of the bigger picture, I think Google pulled a fast one here on Apple and RIM, who just purchased Nortel's patents for $4.5 billion after Google dropped from the race. Surely, Google did not come up with this Motorola deal in weeks after being spurned? I think they forced Apple, RIM, EMC (whoever else) to pay up while they worked on this deal in the background.

715.8.2011 23:35

This seems like a good move...Motorola isn't always on the cutting edge, but their phones tend to be made very well (they let HTC and Samsung make the mistakes). I am sure google is tired of having their flagship phones made by HTC; it makes them look bad when the battery dies after 4 hours. If it were not for their crummy UI overlays, they would be the best android devices on the market...and if google owns them, then those should go away.



816.8.2011 1:15

Originally posted by KillerBug:
This seems like a good move...Motorola isn't always on the cutting edge, but their phones tend to be made very well (they let HTC and Samsung make the mistakes). I am sure google is tired of having their flagship phones made by HTC; it makes them look bad when the battery dies after 4 hours. If it were not for their crummy UI overlays, they would be the best android devices on the market...and if google owns them, then those should go away.
Not just an HTC thing, the GF's brand new Droid 3 dies within 6 hours with minimal use (I'm talking 10 texts, 1 phone call, Gmail syncing)

916.8.2011 5:16

I like the smooth way Google do play safe business.
Even with the $2.5 billion break-up fee....I think the deal will go true and it will make Android OS stronger now Google holding almost 25,000 patents same as Microsoft and the double that Apple:

"Defending Android"
http://t.co/cUpCri5

On another hand:
Google could turn into a patent bully and sue its competitors for certain implementations in their operating systems that could allude to Motorola’s patents. If this indeed happens, both Apple and Microsoft should get ready to face some legal challenges over the coming years.

P.S.
Motorola Inc was split this year into two: Motorola Mobility, which got the faster-growing cellphone and TV set-top box businesses; and Motorola Solutions, which sells gear like walkie-talkies to corporate and government clients.

This message has been edited since its posting. Latest edit was made on 16 Aug 2011 @ 6:37

Live Free or Die.
The rule above all the rules is: Survive !
Capitalism: Funnel most of the $$$ to the already rich.

1016.8.2011 8:43

Originally posted by KillerBug:
This seems like a good move...Motorola isn't always on the cutting edge, but their phones tend to be made very well (they let HTC and Samsung make the mistakes). I am sure google is tired of having their flagship phones made by HTC; it makes them look bad when the battery dies after 4 hours. If it were not for their crummy UI overlays, they would be the best android devices on the market...and if google owns them, then those should go away.
The Nexus S is made by Samsung, not HTC.

only the Nexus was made by HTC.

1119.8.2011 14:35

Originally posted by DVDBack23:
Originally posted by oappi:
@DVDBack23
Oh thanks for clarifying that =)

It is going to be interesting to see how google buying motorola is going to affect rest of the android device manufacturers, like samsung and htc.

If you ask me buying nokia would have been wiser choise. They still have big market share, good brand, it is very cheap and has a lot of patents that would be useful against apple and ms. Not to mention kill windows phone in the process (at the moment wp has 1.6% market share, but nokia going for wp might bring it alive a bit).
No problem. In regards to your Nokia statement, while it of course would have made some sense, it would not have come cheap. Any bid for Nokia (even now) would need to be in the $25 billion range, which makes it not really worth it since Google could probably buy every patent they need for less than that :)

In terms of the bigger picture, I think Google pulled a fast one here on Apple and RIM, who just purchased Nortel's patents for $4.5 billion after Google dropped from the race. Surely, Google did not come up with this Motorola deal in weeks after being spurned? I think they forced Apple, RIM, EMC (whoever else) to pay up while they worked on this deal in the background.

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