Google to Buy Motorola Mobility for $12.5 billionquote:
Google to Buy Motorola Mobility
Google announced on Monday that it would acquire Motorola Mobility Holdings, the cellphone business that was split from Motorola, for $40 a share in cash, or $12.5 billion.
The offer — by far Google’s largest acquisition — represents a premium of 63 percent to the closing price of Motorola Mobility shares on Friday. Motorola manufactures phones that run on Google’s Android software.
Android has become an increasingly important platform for Google, as global smartphone adoption accelerates. The platform, launched in 2007, is now used in more than 150 million devices, with 39 manufacturers.
The deal answers a big question about Google’s next strategic step in wireless. Google has been battling with rivals Apple and Microsoft over patents. Just last month, Apple and Microsoft led a consortium of technology companies in a $4.5 billion purchase of roughly 6,000 patents from Nortel Networks, the Canadian telecommunications maker that filed for bankruptcy in 2008. Google, which lost out in the bidding, criticized the deal as an anti-competitive strategy. Several weeks later, Google paid $4.5 billion for more than 1,000 patents from I.B.M.
While the acquisition will move Google directly into the telecommunications hardware business, Larry Page, Google’s chief executive, said in a blog post “this acquisition will not change our commitment to run Android as an open platform. Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business.”
The acquisition of Motorola is a notable one for the technology giant, which typically makes dozens of acquisitions per year but has only tackled a handful of billion-dollar transactions in its 13-year history. On the company’s official blog, Mr. Page said the company was purchasing the handset maker to bolster its Android mobile operating system and increase the number of patents it owns.
“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,” Mr. Page said.
Carl C. Icahn, Motorola Mobility’s second-largest shareholder, had urged the company last month to “explore alternatives regarding its patent portfolio to enhance shareholder value.” Mr. Icahn owns 9.03 percent of Motorola Mobility.
Lazard and the law firm of Cleary Gottlieb Steen & Hamilton advised Google. Frank Quattrone’s investment bank, Qatalyst Partners, and Centerview Partners advised Motorola Mobility.