Google plans to acquire Motorola Mobility

In a move to further strengthen Android, Google announced today that it plans to acquire Motorola Mobility (MMI) for $12.5 billion. If the deal is approved, Motorola shareholders will receive $40 a share. The stock closed at 24.47 on Friday and soared to over $38 a share on Monday, a 56% increase.

Motorola Mobility was recently spun off from it’s parent company Motorola at the beginning of 2011. The cellphone maker has more than 20,000 employees and over 17,000 patents.

The move comes in a effort to fend off Apple and Microsoft by increasing and strengthening Google’s patent portfolio.

“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 CEO Larry Page in a blog post about the acquisition.

The acquisition also allows Google to have complete control over the hardware and software of Android phones made by Motorola. This move will likely further accelerate innovation between the two companies. Although, Google plans to continue to license Android to other manufactures.

“This acquisition will not change our commitment to run Android as an open platform. Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business. Many hardware partners have contributed to Android’s success and we look forward to continuing to work with all of them to deliver outstanding user experiences,” said Larry Page.

The deal is subject to FTC approval and needs to be approved by the boards of both companies.

Originally posted 2011-08-15 17:32:55.