MOTOROLA MOBILITY TO BE PURCHASED BY GOOGLE By Hope Wilkos, Writer/Blogger
One of the largest acquisitions in the tech/communications world has been finalized. Google is closing in on the mobile business with the bid to acquire Motorola Mobility Holdings, the cellphone business split from Motorola, for $40 a share in cash or $12.5 billion.
Interestingly enough, Google’s offer is 63% above the closing price of Motorola Mobility shares on Friday.
The strategy behind this deal is most likely two-fold. Google makes the Android mobile operating system used in more than 150 million devices. This would position the company in direct competition with Apple who has definitely got the market edge. Google has been battling over patents with Apple and Microsoft, who purchased approximately 6,000 patents from Nortel Networks for $4.5 billion. The Canadian telecommunications company filed for bankruptcy in 2009. Google later acquired over 1000 patents from IBM. Motorola holds more than 17,000 patents.
Google will continue to run Android as an open platform with Motorola remaining a licensee of Android and run as a separate business.
There is still the uncertainty of winning over the regulatory approval which Google is very confident about since the purchase will foster more competition in the smartphone market. Android accounted for 43.4% of smartphone sales in the second quarter, a significant increase from last year.
Both the Motorola and Google boards have given their approval to the deal.
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