Google will purchase mobile phone manufacturer Motorola Mobility for $12.5 billion, its most expensive acquisition ever.
That’s a big freaking deal if ever we saw one. The all-cash deal amounts to Google paying $40 per share of Motorola Mobility’s stock, a 63% premium over where that company closed at the New York Stock Exchange Friday night.
Motorola Mobility had been one of the biggest supporters of Android, with its handsets garnering some of the strongest attention and also ensuring that it also stayed ahead of the curve and could remain relevant.
By purchasing the company, Google will acquire all sorts of patents that it can now use in conjunction with its army of engineers and experts to unleash the full power of both corporate giants combined.
The biggest part of this purchase is that it finally gives Google a firm standing the hardware market, a place that seems to be the only natural progression for the company.
Although Google does very well existing in the ‘virtual’ space – that is, almost all of its existing business is done with products and services that have no tangible, physical product.
The company has dabbled in the hardware space with the Nexus One phone, which was designed and built internally along with HTC. Many said it was a fantastic phone, but Google’s extreme lack of connections and resources in the manufacturing and logistics world led to a highly underwhelming amount of sales.
By purchasing Motorola Mobility, the game completely changes. Google will no longer need to rely exclusively on other companies to put its ideas and services into physical products – it can do all of it internally.
According to a Reuters report, Google said the deal should close by the end of this year or possibly in early 2012. It does still need to pass regulatory tests in the US and European Union.