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Google completes $12.5bn purchase of Motorola Mobility

Google has bought US phone manufacturer Motorola Mobility for $12.5bn days after getting the green light from the Chinese government for the purchase.

Google’s intentions to purchase Motorola Mobility were announced in August but required approval from the European Commission, the US Department of Justice and Chinese authorities. European and US authorities cleared the deal in February and Chinese authorities approved the transaction over the weekend with the stipulation that Google must keep its Android mobile operating system free for other device manufacturers including  HTC and Samsung for up to five years.

The acquisition allows the online giant to move into the manufacturing of phones and tablet devices and is the largest purchase the company has made to date. Motorola will continue to operate independently from Google’s operations and it will not get preferential treatment with regards to the Android OS.

As a result of the acquisition, Motorola Mobility chief executive Sanjay Jha is  leaving the company, being replaced by Google senior executive Dennis Woodside. Woodside was responsible for building Google’s business in the Middle East, Africa, Eastern Europe and Russia and has worked to boost the company’s revenue in the US as its president of the Americas region.

“Motorola is a great American tech company that has driven the mobile revolution, with a track record of over 80 years of innovation, including the creation of the first cell phone,” says Google chief executive Larry Page. “We all remember Motorola’s StarTAC, which at the time seemed tiny and showed the real potential of these devices. And as a company who made a big, early bet on Android, Motorola has become an incredibly valuable partner to Google.”

Analysts have suggested that Google’s interest in Motorola Mobility was fuelled by the number of patents the mobile manufacturer owns. Google is currently beset by patent battles around the world concerning its Android OS and its wealth of patents from Motorola would be invaluable for the company on this front.

David Hing, London