In a bid to strengthen its mobile business, Google announced on Monday that it would acquire Motorola Mobility Holdings, the cellphone business that was split from Motorola, for $40 a share in cash, or $12.5 billion. The offer—by far Google’s largest ever for an acquisition—is 63% above the closing price of Motorola Mobility shares on Friday. Motorola manufactures phones that run on Google’s Android software. Android has become an increasingly important platform for Google, as global smartphone adoption accelerates. The platform, launched in 2007, is now used in more than 150 million devices, with 39 manufacturers.
The acquisition would turn Google, which makes the Android mobile operating system, into a full-fledged cellphone manufacturer, in direct competition with Apple. “This is an emphatic exclamation point that Google is a mobile company,” says Ben Schachter, an analyst with Macquarie Capital. “This is clearly a defensive deal; they were backed in a corner and they had to protect the Android platform.” The deal answers a big question about Google’s next strategic step in wireless. Google has been battling with Apple and Microsoft over patents. Read more at New York Times.
