In a bid to more competitively compete against Apple, Nokia and other makers of mobile phones, Google on Monday said it would buy Motorola, once a successful supplier of mobile phones.
Google entered into a definitive agreement under which it will acquire Motorola Mobility for $40 per share in cash, or a total of about $12.5 billion, a premium of 63% to the closing price of Motorola Mobility shares on Friday, August 12, 2011. The transaction was unanimously approved by the boards of directors of both companies.
The acquisition of Motorola Mobility, a dedicated Android partner, will enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing. Motorola Mobility will remain a licensee of Android and Android will remain open. Google will run Motorola Mobility as a separate business.
“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,” said Larry Page, chief executive officer of Google.
Today, more than 150 million Android devices have been activated worldwide, over 550,000 devices now lit up every day, through a network of about 39 manufacturers and 231 carriers in 123 countries.
Motorola has a history of over 80 years of innovation in communications technology and products, and in the development of intellectual property, which have helped drive the revolution in mobile computing. Its many industry milestones include the introduction of the world’s first portable cell phone nearly 30 years ago, and the StarTAC - the smallest and lightest phone on earth at time of launch. In 2007, Motorola was a founding member of the Open Handset Alliance that worked to make Android the first truly open and comprehensive platform for mobile devices, said Larry Page, the head of Google.
“We recently explained how companies including Microsoft and Apple are banding together in anti-competitive patent attacks on Android. The U.S. Department of Justice had to intervene in the results of one recent patent auction to “protect competition and innovation in the open source software community” and it is currently looking into the results of the Nortel auction. 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,” said Mr. Page.
The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the U.S., the European Union and other jurisdictions, and the approval of Motorola Mobility’s stockholders. The transaction is expected to close by the end of 2011 or early 2012.
“We expect that this combination will enable us to break new ground for the Android ecosystem. 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,” Andy Rubin, senior vice president of mobile at Google.