This is huge. Since 2008 with the start of Open Handset Alliance, Motorola has been a key member, and they have been churning out Android phones since then. We know the history of Motorola – since its wildly successful RAZR it has had a tough time getting on top again. But their recent smartphones have been better than ever, and they have been running Google’s Android OS almost exclusively (they do still make a few retail hardened Windows Mobile devices).
So it is interesting that Google has just announced that they will be buying Motorola Mobility for $12.5 billion, at a 63% premium over the current shareprice. A relative bargain if you ask me, especially if you consider all the patents they will acquire in the process as well (Motorola currently has around 17,000 wireless patents). The smartphone race has recently become all about patents, and this will give Google a key advantage.
This is also interesting because it means Google will now have hardware manufacturer ability in house. Until now they needed to form hardware partnerships for their reference devices, like the Nexus and Nexus S. They have already used HTC and Samsung in these roles. This means your next Google reference device will in all probability be a Motorola phone. Google will now finally have complete control over the software and hardware, just like that other fruit company they are competing with…
Find the press release below:
Google to Acquire Motorola Mobility
Combination will Supercharge Android, Enhance Competition, and Offer Wonderful User Experiences
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.
“œMotorola 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, “œMotorola 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, “œThis 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, “œWe 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.
