Motorola Mobility (NYSE:MMI) maneuvered Google (NASDAQ:GOOG) into raising its bid price 33 percent before Google eventually settled on $12.5 billion, according to a regulatory filing. The filing details Google's rapid courtship of Motorola and underscores the importance that Google placed on acquiring Motorola's patent portfolio and hardware business.
According to the filing, Andy Rubin, Google's senior vice president and Android chief, reached out to Motorola CEO Sanjay Jha in early July to discuss the consortium of companies that purchased Nortel Network's patent portfolio for $4.5 billion, what its impact might be and strategic options for Motorola's patents. In meetings in July, Motorola expressed concern that it could sell its patents and continue as a standalone company. Over the next several weeks, discussion between the two companies heated up over Google acquiring Motorola.
On Aug.1, according to the filing, Google proposed acquiring Motorola for $30 per share in cash. Four days later, Motorola, advised by Qatalyst Partners, countered the offer and suggested $43.50. Google, advised by investment bank Lazard, raised its offer to $37 per share on Aug. 9, and then later that day, after Jha suggested a price of $40.50 per share, Google raised the offer again to $40 per share. The two companies eventually agreed on that price and announced the deal Aug. 15.
Motorola wanted to negotiate exclusively with Google because of "the risk that a public auction would not result in a transaction at a more attractive price than offered by Google and that a 'failed' attempt to sell" the company "would be highly detrimental," according to the filing.
Google Chairman Eric Schmidt said recently that the search giant's acquisition of Motorola is for more than just Motorola's patent portfolio--Google is interested in collaborating with Motorola on hardware. "We actually believe that the Motorola team has some amazing products coming. ... We're excited to have the product line, to use the Motorola brand, the product architecture, the engineers," Schmidt said in an interview with Salesforce.com's CEO Marc Benioff at the annual Dreamforce conference in San Francisco.
For more:
- see this SEC filing
- see this Bloomberg article
- see this Reuters article
- see this WSJ article (sub. req.)
Related Articles:
Google's Schmidt: We bought Motorola for more than just patents
HTC's Chou: Google's Motorola acquisition is good news
Nokia CEO warns Android OEMs of 'danger' following Google/Motorola deal
What does Google's Motorola acquisition mean for Nokia, RIM?
Sound off: Experts weigh in on why Google purchased Motorola
Google shields Android from patent lawyers with $12.5B Motorola Mobility deal