By: Aseem Gaurav on August 15, 2011
Internet search giant Google has decided to acquire Motorola Mobility, the US mobile company's smartphone business, in a $12.5 bilion cash deal. With this Mountain View Company has now entered into the smartphone and tablet computer market space in a big way – meaning it will now be the owner rather than a partner. This is Google’s largest acquisition to date.
“Motorola’s commitment to Android is a natural fit for the two companies. The association will deliver amazing user experiences that’ll supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I welcome Motorolans to our family of Googlers," said Google chief executive Larry Page, in an official blog post.
As per the deal, Google will buy Motorola Mobility for $40.00 per share, a 63 per cent premium over the closing price of Motorola Mobility shares on August 12. Further, Motorola Mobility will remain an Android licensee and Google will run the unit as a separate business.
Google will also take control of Motorola’s impressive portfolio of patents which will give it the necessary edge in fending off intellectual property lawsuits. Recently the search giant acquired more than 1,000 patents from IBM.
Earlier in January, Motorola spun off Mobility business, which is into producing smartphones, like Motorola Droid and the Defy and computer tablets.
"The deal will add significant value for Motorola Mobility's stockholders and provides compelling new opportunities for our employees, customers, and partners around the world,” said Sanjay Jha, chief executive of Motorola Mobility.
Some analysts say the deal will also take on Apple’s growing dominance in the smartphone and tablet markets with the iPhone and iPad.
As per estimates, by 2012 nearly half of the world’s smartphones will be having Android operating system as a number of hardware developers prefer to use it instead of developing on their own.
