Google Shows Confidence in Motorola Deal; Will Pay $2.5 Billion Even if Deal Fails

[dgstorm]

Yesterday, the big news was that Google plans to purchase Motorola for $12.5 Billion dollars. One of the primary reasons for this acquisition was to bolster Google's patent portfolio with Motorola's considerable 25,000 patents. This will help Google protect Android from the legal war that Apple and Microsoft are currently waging indirectly against Android. Google is so confident and committed to the Motorola deal, they have promised to pay an astonishing $2.5 Billion dollars to Motorola, even if the deal falls through! According to the Bloomberg article, this is more than six times the typical amount that is paid in this sort of breakup fee deal. Here's a quote from the Bloomberg article,

“A high reverse breakup fee shows the buyer’s confidence of getting the deal done,” said Donna Hitscherich, a senior lecturer in finance at Columbia Business School, who is also a former banker and lawyer. “People don’t do deals to get the breakup fee, they do them to get the deals done.”

Also, Elizabeth Nowicki, a mergers and acquisitions law professor at Tulane University Law School in New Orleans, had this to say,

“The unusually high reverse breakup fee shows that Motorola doesn’t want to risk being left alone at the altar, especially in the current market’s conditions."

This just shows what a truly "big" deal this is and how important it is to Google to make this deal go through.

Source: BusinessWeek/Bloomberg and BGR

 

[knighthonor]

What are the lawsuits that apple and Microsoft have on android?

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[steveninspokane]

"purchase Motorola for $12.5 Billion dollars". That's it? I would have that Motorola would have been worth more, I many how many years does it take Moto to profit $12.5 Bil?

 

[northendtrooper]

"purchase Motorola for $12.5 Billion dollars". That's it? I would have that Motorola would have been worth more, I many how many years does it take Moto to profit $12.5 Bil?

If you look at their track record, it is not as impressive as you think. Think about the phones that made Motorola, the razr that kept them afloat then the OG Droid was its last ditch effort to stay afloat. Since then they haven't made any phones that impress the higher ups if you want to call it. I think $12.5 billion is a fair offer.

 

[Dusty]

A few news outlets have now stated that Google is also sniffing around Sprint.

Owning a cell phone maker and a network... that would go over like a fart in a space suit.

 

[gthotie5]

What the? Dusty lol

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