Google Acquires Motorola Mobility for $12.5 billion

google-acquires-motorola-8806029Google Inc. said Monday it is buying cell phone maker Motorola Mobility Holdings Inc. for $12.5 billion in cash. This is the ever biggest acquisition by internet giant as the part of its serious intention of expanding business to beyond core internet business. This deal suspected Google’s agenda to provide total hardware and software experience like Apple. With a $40.00 per share, Google will pay a 63 percent premium to Motorola’s closing price on Friday.

“Motorola Mobility’s total commitment to Android has created a natural fit for our two companies,” said Google CEO Larry Page in a statement. “Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers.”

“This transaction offers significant value for Motorola Mobility’s stockholders and provides compelling new opportunities for our employees, customers, and partners around the world,” said Sanjay Jha, CEO of Motorola Mobility, “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.” Motorola Mobility was separated from the rest of Motorola in January. Motorola Mobility will be now run as a separate business, and Google claims it will have no effect on the Android ecosystem with regards to other hardware partners, but of course, only time will tell how that’s going to pan out. Other than Google buying a competent hardware partner, it also buys one of the most valuable patent portfolios in the mobile industry, causing a massive shift in power in the current let’s-sue-because-we-can’t-compete landscape of the mobile industry. Earlier this month, fresh from losing a bid to buy thousands of patents from bankrupt Nortel, Google Chief Legal Officer David Drummond blasted Microsoft, Apple, Oracle and “other companies,” accusing them of colluding to hamper the increasingly popular Android software by buying up patents. The acquisition has the approval of both companies’ boards and is expected to close by the end of this year or early 2012. It dwarfs Google’s previous biggest deal, the 2008 purchase of DoubleClick for $3.2 billion.