Google Gives Android A Shot In The Arm With Acquisition of Motorola Mobility

Google’s CEO Larry Page announced a very big acquisition deal this morning – They are in agreement to acquire Motorola Mobility, the handset division of Motorola that was spun-off at the beginning of 2011, for $12.5 billion. In a joint press release coming from Mountain View, California and Libertyville, Illinois, the two companies listed details of the acquisition.

Google Inc. (NASDAQ: GOOG) and Motorola Mobility Holdings, Inc. (NYSE: MMI) today announced that they have entered into a definitive agreement under which Google will acquire Motorola Mobility for $40.00 per share in cash, or a total of about $12.5 billion, a premium of 63% to the closing price of Motorola Mobility shares on Friday, August 12, 2011. The transaction was unanimously approved by the boards of directors of both companies.

While Google’s blog post explained how this acquisition would directly benefit them in their ongoing patent wars, the statement was also careful to soothe concerns of other Android licensees and partners. Samsung has built the last Google Nexus S (and Nexus S 4G) and HTC built the Nexus One but I wouldn’t be surprised if Motorola Mobility built the next one.

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.

This acquisition will give Google a better standing against Apple in the iPhone versus Android competition now that it has a hardware maker in its pocket. Whether or not Google’s Motorola Mobility licenses other operating systems like Windows Mobile in the future would also mean this acquisition has potential to shape the whole mobile ecosystem. The future for smartphones and tablets just became a lot more interesting with the announcement from Google to “Supercharge Android” with this acquisition.

Motorola Mobility’s stock price was also supercharged today:

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