Google Purchases Motorola Mobility for $12.5 Billion

Google

About 8 months ago, Motorola split into two companies, Motorola Mobility and Motorola Solutions. Motorola Solutions offers communication solutions for enterprises and governments while Motorola Mobility focuses on consumers and manufacturing mobile devices, including those with the Droid brand.

Google has acquired Motorola Mobility for $40.00 per share in cash, or approximately $12.5 billion, a 63% premium to the closing price of Motorola Mobility on Friday, August 12, 2011.

While it is unusual for Google to purchase a hardware company, Andy Rubin, Senior Vice President of Mobile at Google, said in a statement released early Monday morning, “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.”

CEO of Motorola Mobility, Sanjay Jha, 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.”

While Motorola is only one of many manufacturers that use Google’s Android software, other companies such as Samsung and HTC, will still be allowed to release phones with the Android software.

Google will now be in direct competition with Apple and Blackberry.

Google anticipates the transaction will close at the end of 2011 or beginning of 2012, and Motorola Mobility will run as a separate business.