Google today announced that it would acquire Motorola Mobility Holdings, Inc. (NYSE: MMI) for approximately $12.5 billion in cash.
Representing a premium of 63% to the closing price of Motorola Mobility shares on Friday, August 12, 2011, Google will pay $40 per share in cash for the company.
While Android has been hardware agnostic, Google will now own a maker of phones. The move will also intensify the battle between Google’s Anroid and Apple’s iOS. According to Google, more than 150 million Android devices have been activated worldwide, with over 550,000 devices activated every day through a network of approximately 39 manufacturers and 231 carriers in 123 countries.
Motorola Mobility, a long time Android partner, 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.”
Motorola Mobility Holdings’ portfolio includes converged mobile devices such as smartphones and tablets; wireless accessories; end-to-end video and data delivery; and management solutions, including set-tops and data-access devices.
Subject to customary closing conditions, including the receipt of regulatory approvals and the approval of Motorola Mobility’s stockholders, the transaction is expected to close by the end of 2011 or early 2012.
