Google has announced the acquisition of Motorola Mobility for $12.5 billion in a move it says will “supercharge the Android ecosystem.”
The purchase has been unanimously approved by both boards and Google will pay Motorola shareholders $40 a share, which represents a 63 per cent premium over the closing share price on Friday last, 12 August.
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."
Motorola was a founding member of the Open Handset Alliance which helped launch Android as an open platform in 2007. In 2008 Motorola took the decision to move all its smartphones to the Android platform.
In a bid to ease the worry of other manufacturers regarding the deal with Motorola, Page said nothing will change in terms of its relationship with other smartphone vendors: “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.”
In what will be seen by many as an unexpected move, Google’s purchase of Motorola Mobility is partly an attempt by the company to stave off imminent patent challenges from Microsoft and Apple over the Android operating system: “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 added.
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 the usual conditions and regulatory approval and is expected to close by the end of 2011 or early 2012.
Source: Official Google Blog