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China Greenlights Google-Motorola Mobility Deal
Google clears the final hurdle in its $12.5 billion acquisition of the mobile device company after China extracts a pledge that Android will remain free and open for five years.
Chinese authorities have approved Google’s bid to acquire Motorola Mobility, clearing the final regulatory hurdle in a $12.5 billion deal initiated in August 2011 that gives the search giant a mobile device hardware business to go along with its successful Android operating system for smartphones and tablets.
Regulators in other major regional markets, including the U.S., had already okayed the merger. In exchange for approving the deal on Friday, the Chinese Commerce Ministry’s Anti-Monopoly Bureau extracted a pledge from Google that it would keep Android free and available without discrimination to all device makers for at least five years, The Wall Street Journal reported.
Last January, Motorola divided its mobile device business and its telecommunications equipment business into two independent public companies. Google announced its intent to acquire the former company, now known as Motorola Mobility, on Aug. 15, 2011 in order to “supercharge” its Android mobile operating system and build up its patent portfolio.
Google CEO Larry Page said at the time that the search giant intended “run Motorola as a separate business” and that Google remained committed to keeping Android open and available to all device makers. Andy Rubin, senior vice president of mobile at Google, said “the top five Android licensees” had been consulted ahead of the acquisition and “they all showed very enthusiastic support for the deal.”
Earlier this month, it was reported that Google plans to give multiple mobile device makers early access to its next version of Android in an attempt to create a more robust ecosystem to take on Apple and also to reassure partners that its Motorola Mobility acquisition won’t squeeze them out.
It has also been reported that Google wants to sell co-branded “Nexus” phones running Android Jellybean, the next version of the mobile operating system. It’s unclear whether this rumored phone or phones, which Google would reportedly sell through its own online store, would be built by Motorola Mobility or another Android partner.
The Google-Motorola Mobility merger could close in just a couple of days and layoffs at Motorola Mobility might be in the offing soon after, according to TechCrunch.
Motorola Mobility on Friday filed an 8-K form with the U.S. Securities and Exchange Commission informing the SEC of the Chinese regulators’ decision to clear the deal and the two companies’ intent to finalize the transaction within two business days.
After that, Google will conduct a “listening tour” of Motorola Mobility operations, TechCrunch reported, citing an unnamed source. Google management will be “seeing what everyone does, then making decisions,” the source was quoted as saying. The tech site also claimed to have heard that “there will be layoffs coming imminently.”
By Damon Poeter, PCMag