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MOUNTAIN VIEW, Calif. (AP) — Google Inc. is buying cell phone
maker Motorola Mobility Holdings Inc. for $12.5 billion in cash.
It’s by far Google’s biggest acquisition and a sign the online
search leader is serious about expanding beyond its core Internet
business and setting the agenda in the fast-growing mobile
market.
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Google will pay $40.00 per share, a 63 percent premium to
Motorola’s closing price on Friday.
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Google’s Android operating system runs smartphones that compete
with iPhones, BlackBerrys and Windows-based mobile devices.
Motorola Mobility was separated from the rest of Motorola in
January. The company has remade itself as a maker of smartphones
based on Android, but has struggled against Apple Inc. and Asian
smartphone makers.
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“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.”
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The acquisition has the approval of both companies’ boards and is
expected to close by the end of this year or early 2012. That may
be overly ambitious, however, as the deal is likely to face
regulatory scrutiny. It dwarfs Google’s previous biggest deal, the
2008 purchase of DoubleClick for $3.2 billion, which took a year to
get approval.
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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
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Motorola has nearly three times more patents than
Nortel.
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In premarket trading, shares of Motorola Mobility soared 60
percent, or $14.72, to $39.19. Shares of Google, meanwhile, fell
$14.68, or 2.6 percent, to $549.95.
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