Google would pay Motorola Mobility $2.5 billion if it terminates their merger agreement -- an unusually high breakup fee -- while Motorola Mobility would owe the Internet giant $375 million if it accepted a higher takeover offer, according to regulatory filings.
On Monday, Google announced its $12.5 billion bid for Motorola Mobility. Google executives cited the latter's 17,000-plus patent portfolio as helping to "better protect" the Android operating system for mobile devices from rivals including Apple and Microsoft.
Google is obligated to pay the $2.5 billion fee "under certain other circumstances principally related to a failure to obtain required antitrust clearances," the companies said in 8-K filings Thursday with the Securities and Exchange Commission.
Under the merger agreement, Motorola Mobility may not solicit competing proposals or "participate in any discussions or negotiations regarding alternative business combination transactions," the companies said.
Motorola Mobility's board unanimously approved the deal, which is expected to close by the end of 2011 or early 2012. The agreement is subject to closing conditions including approvals by regulators and Motorola Mobility stockholders.
Separately, on Wednesday, William Hambrecht -- who was named to Motorola Mobility's board by Carl Icahn -- resigned his seat to leave the company with nine directors.
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.