Google plans to acquire Motorola Mobility for about $12.5 billion in cash, with the Internet giant claiming the deal will "supercharge" the Android mobile devices ecosystem.
Google said it will run Motorola Mobility as a separate business. Motorola Mobility will remain a licensee of Android and Android will remain open.
"Motorola Mobility's total commitment to Android has created a natural fit for our two companies," Google CEO Larry Page said in announcing the deal Monday. "Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers."
Motorola Mobility CEO Sanjay Jha commented: "This transaction offers significant value for Motorola Mobility's stockholders and provides compelling new opportunities for our employees, customers, and partners around the world. We have shared a productive partnership with Google to advance the Android platform, and now through this combination we will be able to do even more to innovate and deliver outstanding mobility solutions across our mobile devices and home businesses."
It's not clear what Google's takeover would specifically mean for Motorola Mobility's cable-oriented Home business, which includes set-top boxes, DVRs, cable modems and other service provider software and hardware.
Google has its own Internet set-top strategy, dubbed Google TV, which uses the Android operating system to bring Internet content and interactive features to televisions. So far, sales of Google TV-based products have been poor, and Logitech recently slashed the price of its Revue set-top from $249 to $99 citing weak demand.
Google is proposing to acquire Motorola Mobility for $40.00 per share in cash, a premium of 63% to the closing price of Motorola Mobility shares on Friday, Aug. 12.
The transaction was unanimously approved by the boards of both companies. The deal is subject to other customary closing conditions, including regulatory approvals in the U.S., the European Union and elsewhere, as well as and the approval of Motorola Mobility's stockholders.
Google said the transaction is expected to close by the end of 2011 or early 2012.
Motorola Inc. officially split into two entities Jan. 4, 2011. Motorola Mobility combined the cable set-top and video infrastructure business with the resurgent mobile devices group, and Motorola Solutions merged the enterprise and government communications business units.