Google is buying Motorola mobility – maker of Motorola Xoom tablet — for $ 12.5bn. Photo: Yoshikazu Tsuno/AFP/Getty ImagesGoogle is acquiring Motorola mobility, the American mobile carrier smartphone business in a lot of $ 12.5bn (£ 7.6bn) cash.
Acquisition will enhance Google's growing dominance in the market for nascent smartphone and tablet computer. $ 40 A share deal – which is Google's largest acquisition to date – is a 63% premium on Motorola mobility closing price on the New York Stock Exchange on Friday.
Larry Page, Google chief executive, said: "Motorola mobility total commitment to Android has created a natural fit for our two companies. Together, we will be creating great user experiences that improve the efficiency of the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers. "
Sanjay JHA, CEO of Motorola mobility, added: "this transaction offers significant value for Motorola mobility stockholders and provide compelling new opportunities for our employees, customers and partners around the world.
"We have shared a productive partnership with Google to move the Android platform, and now through this combination we will be able to do even more to innovate and deliver excellent mobility solutions across our mobile devices and home businesses."
The deal represents Google's biggest challenge yet to Apple, which has led the way in the smartphone and tablet markets with the iPhone and iPad.
Other manufacturers, including Samsung, HTC, will be free to release phones using Google's Android software. Google will run Motorola mobility as a separate undertaking.
The takeover also enables Google, which has traditionally avoided involvement in hardware, to manufacture giant Nokia. The move comes just six months after the Finnish phone maker signed a strategic agreement with Microsoft in an attempt to rebuild its ailing fortunes.
Motorola was the first mobile maker partner with Google and release phones based on its Android operating system.
Motorola spun off mobility as a separate company in January of this year. Manufacturing division produces smartphonesprimarily, such as the Motorola Droid and Defy but also makes the tablet computers, and digital set-top boxes.
Analysts have long predicted that half of the world's smartphones will use Android software before the end of 2012, as manufacturers have hastened to adopt Google's operating system instead of developing their own.
The deal is subject to U.S. regulatory approval, which could prove a bigger hurdle than usual, to Google's Android division is already being tested by antitrust investigators. The companies said they expect the takeover to be completed in late 2011 or early 2012.
Andy Rubin, senior vice president of mobile at Google, said: "we expect that this combination will allow us to break new ground for the Android ecosystem.
"However, our vision for Android is unchanged and Google is still determined to Android as an open platform and a vibrant open source community. We will continue to work with all our valued Android partners to develop and distribute innovative Android-powered devices. "
In a blog post announces the acquisition, page said the deal would allow "better protect" Google Android from "anticompetitive threats" over patents from Microsoft, Apple and other companies.
The highly competitive smartphone market has escalated to a bitterly fought the patents war between the major manufacturers and software giants. Microsoft and Apple Sue Motorola and Google over a string of alleged patent infringements on Android.
Monday's deal means that Google now owns Motorola mobility mass of patents – trøde to total around 17,000 – and strengthen its position in the market. However, these patents deter the ongoing trials from Microsoft and Apple.
Page said: "in 2008, Motorola bets big on Android as the only operating system across all its smartphone devices. It was a smart effort and we are thrilled with the success they have achieved so far. We believe that their mobile business is on an upward trajectory and ready for explosive growth. "
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