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Posted at 11:15 AM ET, 08/15/2011

Google agrees to acquire Motorola Mobility


Google announced that it has agreed to acquire Motorola, which makes many of its most prominent Android phones. (PR Newswire)

This post has been updated since it was originally posted:

In Google’s largest acquisition to date, the company announced Monday that it has agreed to acquire Motorola Mobility. The $12.5 billion deal is expected to help the company bolster its leading Android platform.

Motorola Mobility, which spun off from Motorola in January 2011, is the maker of several of the most prominent handsets for Google’s Android platform, including the Droid series of smartphones.

“The combination of Google and Motorola will not only supercharge Android, but will also enhance competition and offer consumers accelerating innovation, greater choice, and wonderful user experiences,” said Google chief executive Larry Page in a company blog post Monday. “I am confident that these great experiences will create huge value for shareholders.”

The deal will give Google control of Motorola’s impressive portfolio of patents — something the company needs to fend off intellectual property lawsuits. The search giant has been aggressively pursuing patents for its mobile division, and recently acquired more than 1,000 from IBM. Google recently lost its bid for patents from bankrupt Canadian tech company Nortel to a consortium of the search company’s largest mobile phone rivals including Apple, Microsoft and Research in Motion. The Department of Justice is looking into the deal, which raised antitrust concerns.

“Why is the portfolio worth five times more to this group collectively than it is to Google?” said Robert Skitol, an antitrust lawyer at the Drinker Biddle firm to The Washington Post in July. “Why are three horizontal competitors being allowed to collaborate and cooperate and join hands together in this, rather than competing against each other?”

Google’s chief legal officer, David Drummond said on a conference call that he does not expect there to be any antitrust concerns about the Motorola acquisition. While Google has hardware agreements with HTC and Samsung for its Nexus phones, the company does not own a device manufacturer.

“We believe strongly that this is pro-competitive transaction,” Drummond said in a conference call. “Android has clearly added competition and innovation and increased user choice,” he said. “Protecting that is pro-competition, almost by definition.”

Google said that it will run Motorola Mobility as a separate division, and Page, Drummond and Google’s mobile head Andy Rubin stressed repeatedly during the call that this will not affect the openness of its Android platform.

“We expect that this combination will enable us to break new ground for the Android ecosystem,” said Andy Rubin, head of Google's mobile division in a statement. “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 companies expect to complete the deal by early 2012, pending approval from stockholders and regulatory agencies in the U.S. and Europe.

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By  |  11:15 AM ET, 08/15/2011

Tags:  Google, Mobile

 
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