A recent filing by Motorola Mobility, which was just taken over by internet giant Google shows that the bid increased by a whopping 33% before Motorola Mobility was sold to Google. The popular handset maker, which had been facing considerable financial distress for a while now, it has been speculated, allowed Google to take it over in hopes of avoiding costly patent disputes.
The filing with the Securities and Exchange Commission (SEC) shows that initially the bid placed by Google was $30 per share, on August 1st. This bid, which was quite higher than the market value was low according to the board and advisers at Motorola who were looking for at least $43.50 per share. A little over a week later, on August 9th, Google bid for the company at $37 a share and the same afternoon, raised it to $40, the price at which it was sold.
The developer of the revolutionary Android operating system and mobile platform had to pay a whopping $12.5 billion for Motorola mobility at the end of the deal. While it is quite higher than the market capitalization of the company, the purchase will give Google some advantage or rather leverage over other smartphone manufacturing companies in the competitive market.
The main competition is the iPhone from Apple and Google’s recent acquisition should allow it to mould its lineup’s hardware as it likes. The deal puts in Google’s hands over 17,000 patents that can be used strategically to negotiate with other competitors and rivals, the biggest of which an inside source suggests, is Apple.
Negotiations for the acquisition had begun as early as July after Google had failed in purchasing Nortel Networks patents. By the end of July it was evident to both companies that a takeover was imminent. It is known, according to the filing with the SEC that a meeting on August 10th was held by Motorola Mobility’s board and its advisers to study the prospect of inviting other bids before finalizing the deal with Google. However, by August 15th, speculation had cleared and the merger was announced in public.
Rumor has it that Google raised its bid from $37 to $40 per share amid fears of outside bids. The takeover seems beneficial to both companies, especially for Google as it can now gain a stronghold in the market, possibly through a drastic reduction in smartphone prices.
