Google announced on Monday that they will be acquiring Motorola Mobility Holdings in a move that puts the search giant in the smartphone hardware business.
“The combination of Google and Motorola will not only supercharge Android, but will also enhance competition and offer consumers accelerating innovation, greater choice, and wonderful user experiences,” wrote Larry Page, Google’s chief executive officer, on the company’s blog.
Google will purchase Motorola shares for £7.6 billion ($12.5 billion), a 63 percent premium to its closing price last Friday. Motorola Mobility’s CEO Sanjay Jha said that the transaction will offer significant value for the company’s shareholders and will provide new opportunities for its employees, customers and partners.
The past three years have been very intense in the smartphone arms race. Research in Motion, who once dominated the smartphone market, has been struggling since the introduction of the Android operating system and Apple’s iPhone.
Observers claim that the deal is about Google gaining ownership of 17,000 of Motorola’s patents, which can defend its Android OS against patent infringement suits.
The acquisition will make Google compete with other smartphone makers who use its operating system, such as Samsung, HTC, LG and Huawei. It will also give the company the power to compete against Apple as a technology manufacturer.
“Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies,” said Page.