Google to acquire Motorola Mobility for $12.5 billion

By on Aug 15, 2011 at 7:39 AM
Breaking August 15, 2011

Google and Motorola Mobility have announced an agreement whereby Google will acquire Motorola for $12.5 billion. The acquisition price equates to $40 per share of Motorola stock, or a premium of 63% over Friday’s closing price. The move is considered in part to be an effort that will better-align Google to compete with Apple’s iPhone, which owned two-thirds of profits among the world’s top-8 smartphone vendors in the second quarter. A Google-owned hardware arm give the company complete control over device hardware, software and services, resulting in an end-to-end user experience that is completely under Google’s command. Perhaps just as important in this day and age, the deal will also give Google control of Motorola’s extensive patent portfolio. “Motorola Mobility’s total commitment to Android has created a natural fit for our two companies,” Google CEO Larry Page said in a statement. “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.” It is unclear how this might affect Google’s relationship with other Android partners. The deal is subject to regulatory approval, of course, and it is expected to close in late 2011 or early 2012. The full press release follows below.

Google to Acquire Motorola Mobility

Combination will Supercharge Android, Enhance Competition, and Offer Wonderful User Experiences

MOUNTAIN VIEW, Calif. & LIBERTYVILLE, Ill.–(BUSINESS WIRE)–Google Inc. (NASDAQ: GOOG) and Motorola Mobility Holdings, Inc. (NYSE: MMI) today announced that they 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.

“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.”

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.

Larry Page, CEO of Google, said, “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, 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.”

Andy Rubin, Senior Vice President of Mobile at Google, said, “We expect that this combination will enable us to break new ground for the Android ecosystem. However, our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community. We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices.”

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.

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  • Anonymous

    So basically, Google decided it would be a good idea to wear Motorola’s failures around their neck. Motorola can’t afford to get sued. Google just made it easier for Microsoft & Apple to get what they want sooner. This shows that everything Motorola’s CEO said the other day was complete BS. The interesting part of this article is that Google/Motorola basically admitted they’re way behind Apple in mobile.

    • Benjamin Akhigbe

      no, Google is miles ahead of Apple. Apple is way behind of Mobile. so you dont know shit about Google.

      • Anonymous

        @google-b1089e2ab5706e3b969f4fcb5d25243b:disqus 

        Actually Google is behind a little. Thats why they’ve been rushing to roll out 4.0 as soon as they can because of upcoming iOS 5.0. There was no need to curse at @SBMobile:disqus , since Google-rola admitted being behind. They are of course trying to remedy that, as would any other company including Apple if they were in the same  situation.
        Lets keep it civil up in this house. 

  • http://www.androidgenus.com AndroidGenus

    Good grief. This is the Gee Willikins! moment of the day.

  • Anonymous

    The real winner: Microsoft, Android partners will jump back to Windows Phone… reasons: Google will always benefit its Mobile Phone business (aka Motorola) then rivals, so Samsung and LG while they may be happy to be (quasi protected) by Google new patents, feeling left behind will be worse and if they jump to Windows Phone completely could avoid Microsoft’s Android Tax altogether.

  • Anonymous

    I am not sure this is a bad thing for HTC. They were vulnerable to the patent wars and this puts Google in a position to defend its intellectual property. I am guessing that Google worked out details with HTC before this move. Motorola has been concentrating on the high end, so this leaves room for HTC.
    More interesting is the effect on Samsung. They are pushing their Bada platform and a lot of their growth is in the feature phone market. The are still smarting from the Galaxy tab ruling in Europe.

  • Anonymous

    Is there an upside to this?

  • http://twitter.com/shigzeo shigzeo

    Considering Google’s reticence to actually allow update a slew of their own customers’ hardware, I consider this bad news. Sure, they’ll have the hardware, but what they’ll also have the impetus to screw their other customers with delayed updates, or no updates at all.

    Here’s hoping that this really IS good news.

    • Anonymous

      This worries me as well.  I hope they don’t go there.

  • MBF

    Just another example of someone trying to copy Apple. Imitating not Innovating….

    • Anonymous

      You may be right about this.  Time will tell.  It might be a way for them to protect their partners from lawsuits from the likes of crApple.

  • Anonymous

    Now Google needs go just one step further. They, instead of that other company, should buy T-Mobile. Then they really could provide the best user experience.

    • http://www.facebook.com/matt.mingkee Matt Tsui

      Perhaps AT&T force Google not to buy DT US “corpse”.

  • Anonymous

    Fellow Goofans (aka Apple Haters) what should we be called now.  I understand that Google will be called Googorola from now one, so I need your help on what to rename Goofans (aka Apple Haters!)

    • Anonymous

      Typical post by a crApple fanboy.  You just don’t really get it do you?  We like innovation that allows us to do things they way we want.  This isn’t about liking Google (or any particular company).  It is about getting things done the way we want.  I realize this is difficult for the limited size of your fanboy brain, but it isn’t about Google.  It is about getting things done.  This move allows Google to stop lame companies like crApple from suing them since that is the path crApple has chosen instead of actually innovating.

      • Wow

        Google innovated? What last time I check they just re-make other people’s products. Of course they are gonna get sued. You sound like just as big of a fanboy when you defend a company like that and accuse their rival company of just “suing” and not innovating when the rival company invented the touchscreen smartphone market as it is known today’s

      • Anonymous

        Sure man.  I hear ya!  Apple doesn’t let you get things done.  Google does.  That’s why I love Google!

  • http://mediamonstrosity.com Media Monstrosity

    Wasn’t expecting that! Best of luck to all the people from Motorola working for Google now, wonder really how separate the businesses will be.

  • Anonymous

    Who wins here? Microsoft! HTC and Samsung will trow their weight behind WM7 now. Android will only have Moto by next year and good be the one out down the road. Thought I loved Motorola in the day and hop to have a great phone with them in the future.

  • Libertyville Longtimer

    Google software engineers probably think they don’t need the Moto software engineers, but they’ll be screwed if they don’t keep the guys in Libertyville, IL.

    The HW guys are safe – Google doesn’t know shit about RF & hardware design – but they are cocky & think they know how to write Android / phone software.  Andy Rubin is probably licking his chops.

    If this results in Libertyville layoffs, a lot of angry senior software engineers are going to raise hell.

  • Booboolala2000

    The only thing this changes is that Motorola won’t be the last in getting an update out. Can’t wait to see what happens with my XOOM. In the next few months. ICS

  • Anonymous

    I said a long time ago that Google is going to become a handset maker. I knew the Nexus One, was them just testing the waters. Now Google takes another step forward and acquires Motorola. And smart of them to say that Motorola will be a separate company, as to not have other Android device makers get worried.

    I hope LG and HTC have a backup plan, because we all know the advantage Motorola now has over them when it comes to Android. It would be foolish of them to underestimate the powers of the synergy now formed between Google and Motorola.
    Contraction of the number of Android handset and tablet makers could be coming sooner than I expected.

  • Nabil Stendardo

    I don’t think other OHA members were left out. I assume one main reason for this acquisition: Patents. Google got outbid both with the Novell deal and the Nortel deal. Strangely nobody mentioned the ongoing trial with Oracle. Google happened to have a very small patent portfolio and getting thousands of patents increase the chance a litigator (Oracle, Apple, Microsoft, or even Intellectual Ventures’s shell companies) would infringe some of them, thus giving it a chance of getting cross licensing agreements.

    Another reason is that Motorola started asking for royalties to other OHA members, and thus google needed to intervene in order to protect the OHA.

    • Geokaplan

      But finish the sentence…Motorola was going to go after the other OHA members for royalties because the phones the other members were making infringed on patents owned by Moto (or so they said). That would lead one to believe that Android itself was responsible for the infringements. Just as with Microsoft, though, it is easier to shake down each manufacturer one at a time than to chase down Google, so Moto was prepared to bring litigation against its competitors.
      .
      This posture of Google about poor, oppressed us is too funny to believe. When Oracle is through with them, they’ll either have to eat the per-license fees due to Oracle for future licenses or begin passing along the costs to each of the OHA members licensing Android–it will be “free” no more.

      At that point, WebOS and WinMo7 may begin to look much more attractive to HTC, Samsung and the rest.

  • http://pulse.yahoo.com/_5HSF7K6WH3MOY3WOLI6C52M3LM Lily Rice

    I just paìd $22.85 for an ìPad 2-64GB and my girlfriend loves her Panasonic Lumix GF 1 Camera that we got for $38.78 there arriving tomorrow by UPS. I will never pay such expensive retail prices in stores again. Especially when I also sold a 40 inch LED TV to my boss for $625 which only cost me $62.81 to buy. Here is the website we use to get it all from, CentHub.còm

  • Chris878945

    Does this mean no moto blur :D

  • Smjunaidiqbal

    Every thing is to get 1700 patents under belt

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