Google buys Motorola Mobility for $12.5 billion

Google (Nasdaq: GOOG) is buying Motorola Mobility (NYSE: MMI) for $12.5 billion, the company announced today, saying the two companies had entered into a definitive agreement and that both boards already had approved the deal.

Motorola Mobility shareholders will get $40 per share, a 63 percent premium on the share's closing price Friday.

The acquisition of Motorola Mobility, already a dedicated Android partner, will help Google compete in the mobile computing market, Google CEO Larry Page said during a coference call this morning. He said the company will maintain Android as an open platform.

"Motorola will remain a licensee of Android and Android will remain open," he said. "We will run Motorola as a separate business. Many hardware partners have contributed to Android's success and we look forward to continuing to work with all of them to deliver outstanding user experiences."

Page called the two a "natural fit.

"Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers," he said.

Sanjay Jha, CEO of Motorola Mobility, said the relationshp between the two companies has been a strong one.

"We committed to Android in 2008 and the results speak for themselves," he said during the call. "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."

Page also said the deal will help Google push innovation in the home devices and video solutions business, and also talked about how acquiring Motorola Mobility would strengthen its patent portfolio.

"We recently explained how companies including Microsoft and Apple are banding together in anti-competitive patent attacks on Android," Page said. "The U.S. Department of Justice had to intervene in the results of one recent patent auction to ‘protect competition and innovation in the open source software community' and it is currently looking into the results of the Nortel auction.

"Our acquisition of Motorola will increase competition by strengthening Google's patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies."

For more:
- see this release
- see this blog post
- see this Wall Street Journal article

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