Business, Economics and Jobs

Google to buy Motorola Mobility for $12.5 billion

Technology giant Google announced on Monday that it had reached a deal to buy Motorola Mobility for $12.5 billion, a move designed to "supercharge" Google's Android mobile-phone software, according to CEO Larry Page.

Google will pay $40.00 per share in cash for Motorola Mobility, a premium of 63 percent to the closing price of the mobile-phone maker's shares on Friday.

"Motorola’s total commitment to Android in mobile devices is one of many reasons that there is a natural fit between our two companies," Page wrote in a blog post on Google's company blog. "Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers everywhere."

According to The New York Times, the deal will be Google's largest ever "by far," and it comes just a month after the company lost out to Microsoft and Apple in the bidding for 6,000 patent assets owned by Nortel Networks, the telecommunications maker that filed for bankruptcy in 2008.

With the acquisition of Motorola Mobility, Google gains patents and enters the telecommunications hardware business, the Times points out, but Page said that Android will continue to be an open platform, available to other mobile-phone makers, and that Motorola will be run separately from the rest of Google.

"This acquisition will not change our commitment to run Android as an open platform," Page said. "Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business."

In a press release announcing the deal, Motorola Mobility's CEO Sanjay Jha framed the deal as the next step in a "productive partnership."

"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," Jha said.

According to Page, more than 150 million Android devices have been activated worldwide, and the Android network includes 39 manufacturers and 231 carriers in 123 countries.

Motorola Mobility split from Motorola Solutions and began trading as a separate company earlier this year, CNN reports. Motorola Solutions makes telecom equipment for public safety use. Just last month, according to the Times, billionaire Carl Icahn, Motorola Mobility’s second-largest shareholder, urged the company to “explore alternatives regarding its patent portfolio to enhance shareholder value.”