Google completed the acquisition of the Motorola Mobility for $12.5 billion, the company’s largest acquisition to date, and appointed a new management team at the helm of mobile phone maker, announced Tuesday the operator of the largest search engine, cited by Reuters. The new CEO of Motorola Mobility is Dennis Woodside, ex-chair of Google Division for North America and South America.
Completion of the transaction comes just days after the companies have received approval from the Chinese government. U.S. and European authorities have approved the transaction in February. Acquiring Motorola Mobility allows Google to enter, for the first time, the manufacturing segment of mobile phones and tablets. Also, Google will get access to over 17,000 of valuable patents owned by Motorola. Authorities in China have come up with one condition: Android free for 5 years.
“We are delighted that the deal has been approved in all jurisdictions” reads a statement from Motorola Mobility, in an official email confirming that the deal received approval from China. According to Chinese law, companies that do business in this market and that have annual global revenues exceeding 10 billion yuan (equivalent to $1.5 billion) with revenues in China of 400 million yuan should seek approval from government Beijing for the acquisition.
This is the largest acquisition in the industry, on this segment, in the last decade. “Our position regarding the acquisition Motorola has not changed, we look forward to conclude the business,” said, in turn, representatives from Google, in an official statement. The company also confirmed it has received approval from Chinese authorities.
Google bought Motorola stock at 63% more than the value traded in 2011, according to the Washington Post. Motorola shares rose 59% after the announcement, during the pre-opening electronic trading on the New York Stock Exchange.
Fight on patents
Google, whose Android operating system is installed on smartphones made by Motorola Mobility and other companies like Samsung Electronics, has now obtained patents necessary to compete more effectively with Apple’s iPhone. Last year, Google has failed to buy thousands of patents from the bankrupt company Nortel. Legal Director of Google, David Drummond, has accused Microsoft, Apple, Oracle and other companies of joining together to prevent the rise of Android, through acquisition of patents. Google now owns 17,000 patents from Motorola, and this will make a big difference in the fight against “lifetime” rivals from Apple and Microsoft, writes the Financial Times.
Larry Page about acquiring Motorola Mobility
In a comment on the official blog, Google’s CEO said last year that since the launch of Android in 2007, over 150 million mobile phones are using this operating system, and their number increases daily by 550,000 units. This means that the operating system is installed on the devices of 39 producers, on 231 networks in 123 countries. “Given the success of Android we sought ways to change the system. This is why we acquired Motorola,” he said.
Page counts on the “potential of smartphones division and boxes set-up” and sees a major source of growth in this segment.
Who’s Afraid of Google
Unlike operating system used by Apple, Google said that Android is “open to all and will not be used exclusively by any manufacturer.” It is the first time the American company is trying to calm down the markets.
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