Google to acquire Motorola Mobility for US$12.5 billion
By Pawel Piejko
August 15, 2011
Google has announced today that it is going to purchase Motorola Mobility for a price of US$40 per share, which adds up to a total amount of US$12.5 billion. Taking Google's patent wars into account, Motorola's portfolio of 17,000 patents could have been an important factor behind the deal. According to a blog post by Google's CEO Larry Page, Motorola will be run as a separate business, while Android will remain an open platform.
More than 150 million devices running Google's Android have been activated worldwide and this number is increased by 550,000 new devices every day, Larry Page says. While Motorola has been committed to the Android platform since 2008, with, for instance, the DROID line of smartphones, Larry Page calls the acquisition a "natural fit," adding that it's a way to improve the Android ecosystem and to enhance competition on the market.
The transaction, however, needs regulatory approvals from the U.S., the European Union, as well as Motorola Mobility's stockholders, and is expected to be closed by "the end of 2011 or early 2012," according to the press release.
Motorola Mobility was formed in January 2011, after Motorola Inc. split into two companies. Motorola Solutions has been focused on enterprise-tailored solutions, while Motorola Mobility on cell phones and tablets. The company has certainly contributed to the development of the mobile industry in general, such as by having released the world's first portable cellular telephone and the StarTAC clamshell, and by being a founding member of the Open Handset Alliance.
According to a recent comScore report, in June 2011 Motorola was ranked as the third mobile OEM in the U.S., with 14.5 percent of mobile subscribers using its devices (smartphone and non-smartphone), behind LG and Samsung, while globally Motorola was ranked 7th in 2010, with just a 2.4 percent market share, according to Gartner.
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