Google Acquires Illinois-Based Motorola Mobility
(With additional reporting from The Associated Press)
Google is buying Illinois-based cell phone maker Motorola Mobility for $12.5 billion in cash in what is by far the company's biggest acquisition to date.
Google Inc. will pay $40.00 per share, a 63 percent premium to Motorola's closing price on Friday.
The companies say the deal has been approved by the boards of both companies.
"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."
The deal gives Google direct control over the maker of many of its Android phones. In pre-market trading, shares of Motorola Mobility Holdings Inc. are up 60 percent, or $14.72, to $39.19.
What Google likely wants from the acquisition is Motorola's trove of more than 17,000 patents on phone technology. Google recently lost out to a consortium that included Microsoft Corp., Apple and Research In Motion Ltd. in bidding for thousands of patents from Novell Inc., a maker of computer-networking software, and Nortel Networks, a Canadian telecom gear maker that is bankrupt and is selling itself off in pieces.
Motorola has nearly three times more patents than Nortel.
Earlier this year, Motorola Mobility's CEO announced the company would be staying put in Illinois thanks to a 10-year benefit package from the governor. Motorola Mobility has about 3,000 employees.
(AP Photo/Marcio Jose Sanchez, File)