Google buys Motorola

Google yesterday announced that it plans to buy Motorola Mobile for US$12.5 billion.

Google said it has entered into a ‚definitive agreement‚ to acquire Motorola Mobility for US$12.5 billion. In a statement, the search giant said the deal ‚will enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing.‚

Google said that it will run Motorola Mobility as a separate business. Andy Rubin, SVP of Mobile at Google, said that: ‚our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community.‚

While the company’s statement made no reference to patents, the deal will significantly bolster Google’s intellectual property armoury. Having lost out in deals to buy the patent portfolios of Novell and Nortel, it has been on the look-out for other targets, including negotiating a deal to buy some assets from IBM. The company is subject to a number of actions brought by established rivals, and previously accused Microsoft, Oracle, Apple and others of an ‚organised‚ campaign against Android.

With the value of patent portfolios very much in the spotlight, Motorola had also been urged to explore the value of its holdings. It is likely to be these assets that have drawn Google’s attention as much as the recovering vendor’s handset business, especially as Android already has significant momentum in the smartphone market ‚ Google does not need to acquire Motorola to drive adoption of this platform.

Sanjay Jha, CEO of Motorola Mobility, said: ‚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.‚

The transaction is subject to ‚customary closing conditions,‚ including the receipt of regulatory approval in the US and the EU, and the approval of Motorola Mobility’s shareholders. Google’s offer is at a premium of 63 percent to the closing price of Motorola’s shares on Friday (12 August). The transaction was unanimously approved by the boards of both companies and is expected to close around the end of this year.

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