Advertisement

We need your help now

Support from readers like you keeps The Journal open.

You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.

If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.

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

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?

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.

Readers like you are keeping these stories free for everyone...
A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation.

Close
7 Comments
    Install the app to use these features.
    Mute Cpm
    Favourite Cpm
    Report
    Aug 15th 2011, 4:07 PM

    No doubt they’re buying it as leverage against the recent Apple/Microsoft patent purchases. They probably don’t want to slip up like that again

    9
    Install the app to use these features.
    Mute gareth byrne
    Favourite gareth byrne
    Report
    Aug 15th 2011, 7:16 PM

    So will apple take google to court in germany and try to stop them entering the phone market just like they did with samsung galaxy tab.After all,apple loves throwing its toys out of the pram when it suits them.

    8
    Install the app to use these features.
    Mute Eoin Sheehy
    Favourite Eoin Sheehy
    Report
    Aug 15th 2011, 2:33 PM

    They are paying ‘in cash’? Are they trying to avoid paying taxes or something?

    7
    Install the app to use these features.
    Mute John Needham
    Favourite John Needham
    Report
    Aug 15th 2011, 3:10 PM

    Would assume that’s more of a reference to not buying them with stocks and shares etc, which google seems to do with their smaller acquisitions.

    14
    Install the app to use these features.
    Mute Seán Ó Briain
    Favourite Seán Ó Briain
    Report
    Aug 15th 2011, 3:48 PM

    I wonder how many briefcases they used for payment.

    6
    Install the app to use these features.
    Mute Paddy O'Reilly
    Favourite Paddy O'Reilly
    Report
    Aug 15th 2011, 5:24 PM

    Motorola pretty much invented modern cellular communication, thus must have a big bag of patents.
    If Google were get into the hardware they had few options, HTC has a licensing deal with Microsoft, Samsung would be too expensive, so Motorola was the logical choice as it was the only one using Android exclusively.

    5
    Install the app to use these features.
    Mute Eoin Sheehy
    Favourite Eoin Sheehy
    Report
    Aug 15th 2011, 2:34 PM

    Also I hope that means they’ll starting selling phones in Ireland again after they pulled out of Ireland a few years ago.

    4
Submit a report
Please help us understand how this comment violates our community guidelines.
Thank you for the feedback
Your feedback has been sent to our team for review.
JournalTv
News in 60 seconds