You heard that right. Google have just bought Motorola for $12.5 billion, something which I don't think people were expecting at all.
MOUNTAIN VIEW, Calif. & LIBERTYVILLE, Ill.--(BUSINESS WIRE)--Google Inc. (NASDAQ: GOOG) and Motorola Mobility Holdings, Inc. (NYSE: MMI) today announced that they have entered into a definitive agreement under which Google will acquire Motorola Mobility for $40.00 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.
“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.”
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.
Larry Page, CEO of Google, said, “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.”
Sanjay Jha, CEO of Motorola Mobility, said, “This transaction offers significant value for Motorola Mobility’s stockholders and provides compelling new opportunities for our employees, customers, and partners around the world. We have shared a productive partnership with Google to advance the Android platform, and now through this combination we will be able to do even more to innovate and deliver outstanding mobility solutions across our mobile devices and home businesses.”
Andy Rubin, Senior Vice President of Mobile at Google, said, “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.”
The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the US, 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.
At a price of $40 per share the total comes to about $12.5 billion. Google are hoping this acquisition will "supercharge the Android ecosystem" and will be making Motorola a dedicated partner for Android.
This unseen move may or may not upset its other Android partners such as HTC, Samsung, LG...etc. With Google concentrating on making Motorola devices the best they can be. It may also mean that Motorola devices will get exclusive Android functions and features before any other manufacturers.
Google has pledged that it will continue to offer Android as an open source platform.
With the purchase of Motorola, Google will now have over 17,000 patents with another 7500 pending under its belt. There has been an on-going war with patents between Microsoft, Apple and Google. Google recently came out saying that Microsoft and Apple don't know how to compete so they instead fight with patents. With all these patents Google will be able to fight back and get everyone off Androids back, making Android more secure and powerful against the competition.
I'm guessing the next Nexus phone will also be made by Motorola. We will have to wait and see.