Google Inc, maker of the Android mobile-phone software, agreed to buy mobile-phone maker Motorola Mobility Holdings Inc for $12.5 billion, gaining wireless patents and entering the hardware business in its biggest deal.
Motorola shareholders would get $40 a share in cash, the companies said in a statement on Monday. That’s 63 per cent more than Motorola Mobility’s closing price on the New York Stock Exchange on Friday. Both boards have approved the deal.
Google, whose Android software runs mobile phones made by Motorola Mobility and companies such as Samsung Electronics Co, gains patents it needs to compete against Apple Inc’s iPhone. The deal - the largest wireless equipment deal in at least a decade, according to data compiled by Bloomberg - also makes Google a competitor to most of the handset makers that use Android.
“This combination will enable us to break new ground for the Android ecosystem,” Andy Rubin, a Google senior vice president, said in the release. Android, which Google gives away for free, will remain available to other manufacturers, he said.
Motorola Mobility, based in Libertyville, Illinois, rose as much as $15.03, or 61 per cent, to $39.5 in early trading after closing at $24.47 on the New York Stock Exchange on Friday. Google, based in Mountain View, California, fell as much as $18.78, or 3.3 per cent, to $544.99 after closing at $563.77 on the Nasdaq Stock Market. InterDigital Inc, owner of mobile-phone patents that’s considering a sale, fell as much as $17.67, or 23 per cent, to $58.05.
END FOR PIONEER
Android was the best-selling smartphone operating system in the second quarter as sales rose more than fourfold to 43.3 per cent of the market, led by Samsung and HTC Corp, according to research firm Gartner Inc. Apple Inc had an 18.2 per cent share, the researcher said. While Motorola Mobility’s Droid phone have found a following in the US, globally the company ranks outside the top players in the smartphone market.
The deal marks an end as an independent company for a company that helped pioneer mobile phones and introduced its first consumer handset in the early 1980s. Motorola announced a plan to spin off its mobile-phone business in March 2008 amid market share losses and pressure from activist investor Carl Icahn. The company then delayed the move amid the global recession before completing the split in January. Motorola Inc became Motorola Solutions Inc, which makes radio equipment to emergency workers and scanning devices for retailers.
Last month, billionaire Icahn urged Motorola Mobility to explore alternatives for its patent portfolio after Nortel Networks Corp sold wireless-technology intellectual property for $4.5 billion. Since the January spinoff, Motorola Mobility shares have lost about a fifth of their value as the company has struggled to return to profitability and keep pace with larger rivals such as Samsung and Apple.
