Google announces plans to acquire Motorola Mobility for $12.5B

Posted:
in iPhone edited January 2014
Google revealed on Monday that it will buy handset maker Motorola Mobility, giving the search giant an entrance into the hardware business and allowing it to compete with Apple more directly by building devices tailored specifically for its Android mobile operating system.



The company announced the planned acquisition, pending regulatory approval,and said the combination of the two companies will "supercharge Android, enhance competition, and offer wonderful user experiences."



"Motorola Mobility?s total commitment to Android has created a natural fit for our two companies," Google CEO Larry Page said. "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 sale price of $12.5 billion amounts to about $40 per share in cash, or a premium of 63 percent over the closing price of Motorola shares on Friday, Aug. 12. The boards of directors of both companies unanimously approved the pending deal.



"This transaction offers significant value for Motorola Mobility's stockholders and provides compelling new opportunities for our employees, customers, and partners around the world," said Sanjay Jha, CEO of Motorola Mobility.



"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."



Google said it will continue to run Motorola Mobility as a separate business. The company will remain a licensee of Android, and its mobile operating system will "remain open."







The deal must receive regulatory approval in the U.S., Europe and other regions. The transaction is expected to be finalized by the end of 2011 or early 2012.



"We expect that this combination will enable us to break new ground for the Android ecosystem," said Andy Rubin, senior vice president of mobile at Google. "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."
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Comments

  • msuberlymsuberly Posts: 226member
    I predict this move will squeeze out other Android licensees. There is a reason Microsoft did not build computers. I doubt this will have much effect on Apple.
  • lilgto64lilgto64 Posts: 1,147member
    I thought the design behind Android let IT be tailored to fit any hardware. Isn't tailoring the hardware to suit the software the opposite of that? Or are they just copying Apple once again and making hardware and software together that are designed from the get go to work together? ANd what impact will that have on any other mfgs desire to use the OS?
  • gchristegchriste Posts: 43member
    Quote:
    Originally Posted by lilgto64 View Post


    I thought the design behind Android let IT be tailored to fit any hardware. Isn't tailoring the hardware to suit the software the opposite of that? Or are they just copying Apple once again and making hardware and software together that are designed from the get go to work together? ANd what impact will that have on any other mfgs desire to use the OS?



    You would have to think this will seriously piss off HTC, Samsung etc. Especially given the issues around Google preventing some licences putting other third party apps on the handset. On the one hand saying you must play by our rules, and now directly competing, sure to annoy them no end.



    And so much for all the hyperbole about how bad patents are, let's just go and bus us some more!



    And... a 63% premium, wow, that is a lot of cash burnt. Wonder what the shareholders reactions will be. Will be interesting to see how the market responds.
  • cloudgazercloudgazer Posts: 2,161member
    Hmm, things just got interesting.
  • y.m.s.bushany.m.s.bushan Posts: 54member
    Quote:
    Originally Posted by msuberly View Post


    I predict this move will squeeze out other Android lisencees. There is a reason Microsoft did not build computers. I doubt this will have much effect on Apple.



    This will bring good competition between Apple and Google. As a result Apple has to do things better to excel and Apple will do that.
  • bageljoeybageljoey Posts: 1,719member
    Bold move. I wonder what HTC and other Android using handset makers will think about this...
  • ksecksec Posts: 1,169member
    No, they didn't bought Motorola because of building Andriod Devices or making hardware etc. They brought Moto because of their HUGE patents portfolio.



    I have always called for Apple to acquire Moto. They have a gigantic no. of patents relating to Tele communication, much more then Nortel or Nokia.
  • gchristegchriste Posts: 43member
    Quote:
    Originally Posted by Y.M.S.BUSHAN View Post


    This will bring good competition between Apple and Google. As a result Apple has to do things better to excel and Apple will do that.



    While true, I agree with the above statement about it squeezing the other Android licences more. Think about it, if you are an Android fan, you will buy Android, from one of many vendors. You never were going to buy apple.



    Now it will come down to choice between a tightly integrated (oh the irony) Googorola handset, and the rest of the Android bunch.
  • gchristegchriste Posts: 43member
    Quote:
    Originally Posted by ksec View Post


    No, they didn't bought Motorola because of building Andriod Devices or making hardware etc. They brought Moto because of their HUGE patents portfolio.



    And if true, which I suspect it is, shows they think they were in a lot of trouble with there current position, enough to splash $12B at 63% premium worth!
  • cloudgazercloudgazer Posts: 2,161member
    Quote:
    Originally Posted by ksec View Post


    No, they didn't bought Motorola because of building Andriod Devices or making hardware etc. They brought Moto because of their HUGE patents portfolio.



    RIght, and I think one of the few things we can conclude immediately is that Moto will continue to fight both MS & Apple with every legal tool available. They will be hoping to have acquired enough legal leverage in terms that by the time the merger goes through they are in a position to demand broad cross licenses with both.



    Even if Apple or MS gets an injunction that cripple's Moto's business, this purchase offer allows Moto to ignore the damage and press on.
  • ksecksec Posts: 1,169member
    It was Moto Mobility they brought, at 63% premium
  • satchmosatchmo Posts: 2,686member
    So much for open source.
  • ksecksec Posts: 1,169member
    Google in their Press State it wont be a merge. Moto Mobility will runs as a separate unit. So business as usual. There will still be Moto Phones. It is only the owner changed hands.



    And of coz, the most important pieces is the on going battle between M$ and Moto on Andriod Patents issues.
  • cloudgazercloudgazer Posts: 2,161member
    For those curious there's a conference call at 8.30ET



    http://investor.shareholder.com/medi...BCF4D43C080953
  • digitalclipsdigitalclips Posts: 15,311member
    Quote:
    Originally Posted by msuberly View Post


    I predict this move will squeeze out other Android licensees. There is a reason Microsoft did not build computers. I doubt this will have much effect on Apple.



    My exact first thought. Then you have to think they thought this through ... something else might be going on here. As others have said maybe patents.
  • stelligentstelligent Posts: 2,680member
    I wonder what was more appealing to GOOG - the control of hardware design or Motorola's patent portfolio?



    I also wonder if this was first proposed by Motorola. Their CEO has been opining for some time that he wanted control over the OS, but his company does not have a strong record for it. So maybe he was hinting at this all along?
  • ksecksec Posts: 1,169member
    And Oh, i forgot.. No more "Hello Moto"



    It is now, " Goodbye, Moto" :P
  • stelligentstelligent Posts: 2,680member
    Quote:
    Originally Posted by ksec View Post


    And i have yet to see where this 12B 63% premium coming from. Moto has been trading at $40 for a few days already. So where is this "premium" coming from?



    It has? You're mixing up Motorola solutions and Motorola Mobility.
  • iqatedoiqatedo Posts: 1,408member
    This still requires regulatory approval, wonder whether licensees will be heard and what they might say?
  • gchristegchriste Posts: 43member
    Quote:
    Originally Posted by ksec View Post


    And i have yet to see where this 12B 63% premium coming from. Moto has been trading at $40 for a few days already. So where is this "premium" coming from?



    Well it was taken direct form the WSJ breaking news page... though they are not showing it now. My bad if wrong, but just reporting it as they had it



    Though as pointed out above, Motorola Mobility is what they are buying, not Motorola.
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