Mountain View, Calif.—Google has agreed to acquire Motorola Mobility Holdings, a leader in developing Android smartphones, in an all-cash deal valued at $12.5 billion. Google said it expects the deal to close later this year or in early 2012.
Google will run Motorola Mobility as a separate business, and Sanjay Jha will continue as CEO of Motorola Mobility. The deal is intended in large part to strengthen Google's Android business. And, like Google's previous acquisition of Admob, it is a wager on the increasing importance of the mobile Web.
The deal is also viewed as a move by Google to protect itself from a spate of patent lawsuits. “I think, first of all, Google has always been kind of obsessed with patents,” said Reed Phillips, managing partner of DeSilva & Phillips. “Motorola is sitting on about 17,000 patents.”
“Motorola ... has a strong patent portfolio, which will help protect Android from anti-competitive threats from Microsoft, Apple and other companies,” Google CEO Larry Page said during a conference call Monday.