Google to buy Motorola Mobility for $12.5B

Google (Nasdaq: GOOG) is buying Motorola Mobility (NYSE: MMI) for $12.5 billion, the company announced today, saying the two companies had entered into a definitive agreement and that both boards already had approved the deal. Motorola Mobility shareholders will get $40 per share, a 63 percent premium on the share's closing price Friday.

The acquisition of Motorola Mobility, already a dedicated Android partner, will help Google compete in the mobile computing market, Google CEO Larry Page said during a conference call this morning. He said he'd spoken to the top five Android licensees and "they all showed enthusiastic support for the deal." He said Android will remain an open platform.

"Motorola will remain a licensee of Android and Android will remain open," he said. "We will run Motorola as a separate business. Many hardware partners have contributed to Android's success and we look forward to continuing to work with all of them to deliver outstanding user experiences."

Page called the two companies a "natural fit."

"Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers," he said. "Motorola is poised for tremendous growth."

Sanjay Jha, CEO of Motorola Mobility, said the relationship between the two companies has been a strong one.

"We committed to Android in 2008 and the results speak for themselves," he said during the call. "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."

Page also said the deal will help Google push innovation in the home devices and video solutions business.

A major aspect of the acquisition is that it gives Google access to Motorola Mobility's patent portfolio.

"We recently explained how companies including Microsoft and Apple are banding together in anti-competitive patent attacks on Android," Page said. "The U.S. Department of Justice had to intervene in the results of one recent patent auction to ‘protect competition and innovation in the open source software community' and it is currently looking into the results of the Nortel auction.

"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."

Google said it expects the deal to close early in 2012, but acknowledged that, given the size of the deal, approval from regulatory bodies in the U.S. and Europe would be needed. During the conference call, Google's chief legal officer, David Drummond, said the companies are confident the deal would be approved.

For more:
- see this release
- see this blog post
- see this Wall Street Journal article

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