Google to Acquire Motorola Mobility
From our good friends in Mountain View comes the news that they are acquiring Motorola Mobility, the operation that produces cell phones and tablets under the Motorola name.
Motorola Mobility (NYSE: MMI) is the portion of Motorola that has focused on cell phone and lately, tablet technology. It was spun out of the Motorola mother company on January 4, 2011 in order to better focus the operation on success in the mobile marketplace. From this investor package, we see that they are a struggling unit, with losses and negative operating cash flows the norm since Q1 2009.
Here is what Google is saying about the acquisition:
MOUNTAIN VIEW, CA and LIBERTYVILLE, IL – AUGUST 15, 2011 – 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.
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.”
Peter Chou, CEO, HTC:
We welcome the news of today’s acquisition, which demonstrates that Google is deeply committed to defending Android, its partners, and the entire ecosystem.
Bert Nordberg, President & CEO, Sony Ericsson:
I welcome Google’s commitment to defending Android and its partners.
Jong-Seok Park, President & CEO, LG:
We welcome Google’s commitment to defending Android and its partners.
This is a major development for Android and should have repercussions in the industry. Since the Android partners all said the same thing about defending Android and its partners, I surmise that this is in part a response to the Microsoft strategy of enforcing patents purchased from Nortel and developed in-house. We’ll have to keep an eye on Motorola and Google to see how they integrate going forward.Google Press Release Motorola Mobility Financial Presentation