Google launches high-stakes bid for Motorola Mobility
The deal is by far Google's biggest acquisition to date. It will pay $40 per share in cash, a huge 63 per cent premium to Motorola's closing price on Friday. The $12.5-billion price will consume almost a third of Google's cash hoard.
Google makes the popular Android operating system that powers about 150 million cellphones around the world.
Motorola is one of dozens of manufacturers that makes cellphones that run on the Android platform, in direct competition with Research In Motion's BlackBerry, Apple's iPhone and Microsoft's Windows mobile operating system for smartphones.
"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."
There's no question that a driving force behind Google's purchase is Motorola's valuable cache of 17,000 patents on phone technology. It has more than 7,000 patent applications pending.
Motorola Mobility 3-month trading chart
Google recently lost out in a bidding war with a consortium led by rivals Apple, RIM and Microsoft for 6,000 patents held by bankrupt Nortel Networks.Google has charged that Apple, Microsoft, Oracle and others have gone on a patent-buying spree to try to force Google to pay them a rich licensing fee for every Android-equipped device sold. Google is facing a raft of lawsuits that allege that Google's Android system stole patent-protected technology from rival tech companies.
"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," Page said in a Google blog post.
