Mergers & Acquisitions

Mergers & Acquisitions

May 23, 2012

Google to Complete $12.5 Billion Motorola Acquisition This Week

Motorola (News - Alert) is about to be submerged into Google's Mountain View world this week as the $12.5 billion deal is about to close, according to the Huffington Post. An approval of the deal by regulators in China removed the final hurdle from closing the deal.

When Google (News - Alert) first announced the acquisition in 2011, the search giant and mobile OS developer stunned many analysts and investors. Motorola Mobility has mostly been a hardware company focusing on mobile devices while Google has freely distributed its open source mobile operating system, Android, to companies just like Motorola in the past. This was why the move was so surprising as Google has not shown too much interest in creating its own devices or hardware.

However, when delving into the acquisition deeper, it makes perfect sense. Google not only can use Motorola's skills as a hardware maker to release future products, like upcoming mobile devices in the Nexus lineup. The company aims to benefit from Motorola's library of patents it has accumulated over the years. Motorola held over 17,000 patents before the acquisition took place.

According to the Huffington Post, “Owning the rights to those patents will provide Google and the mobile device makers who rely on its Android (News - Alert) software with valuable weapons in an intellectual arms race with Apple Inc., Microsoft Corp. and other technology giants.”

The original date that Google announced this acquisition was on August 15, 2011, at $40 per share.

Edited by Carrie Schmelkin

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