This site uses cookies to improve your experience and to provide services and advertising. By continuing to browse, you agree to the use of cookies described in our Cookies Policy. You may change your settings at any time but this may impact on the functionality of the site. To learn more see our Cookies Policy.
Dublin: 9 °C Wednesday 19 February, 2020

Google buying Motorola Mobility for €8.7 billion in cash

Is the deal a sign that Google is really eyeing Motorola Mobility’s cache of over 17,000 patents?

File photo of Google's offices in San Francisco.
File photo of Google's offices in San Francisco.
Image: AP Photo/Marcio Jose Sanchez, File

GOOGLE INC is buying mobile phone manufacturer Motorola Mobility Holdings Inc for €8.69 billion ($12.5 billion) in cash.

It is by far Google’s biggest acquisition and a sign the online search leader is serious about expanding beyond its core internet business and setting the agenda in the fast-growing mobile market.

Google will pay $40.00 per share – a 63 per cent premium to Motorola’s closing price on Friday.

Google’s Android operating system runs smartphones that compete with iPhones, BlackBerrys and Windows-based mobile devices. Motorola Mobility was separated from the rest of Motorola in January. The company has remade itself as a maker of smartphones based on Android, but has struggled against Apple Inc and Asian smartphone makers.

“Motorola Mobility’s total commitment to Android has created a natural fit for our two companies,” said Google CEO Larry Page in a statement. He continued:

Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers.

Push for patents?

The acquisition has the approval of both companies’ boards and is expected to close by the end of this year or early 2012. That may be overly ambitious, however, as the deal is likely to face regulatory scrutiny. It dwarfs Google’s previous biggest deal, the 2008 purchase of DoubleClick for $3.2 billion, which took a year to get approval.

What Google most likely wants from the acquisition is Motorola’s trove of more than 17,000 patents on phone technology. Google recently lost out to a consortium that included Microsoft Corp, Apple and Research In Motion Ltd in bidding for thousands of patents from Novell Inc, a maker of computer-networking software, and Nortel Networks, a Canadian telecoms manufacturer that is bankrupt and is selling itself off in pieces.

Motorola has nearly three times more patents than Nortel.

In premarket trading, shares of Motorola Mobility soared 60 per cent, or $14.72, to $39.19. Shares of Google, meanwhile, fell $14.68, or 2.6 per cent, to $549.95.

  • Share on Facebook
  • Email this article

About the author:

Associated Press

Read next: