Google cleared for Motorola Mobility acquisition
U.S. and European antitrust regulators on Monday approved Google’s acquisition of the cellphone maker Motorola Mobility without formal conditions, paving the way for the search giant to compete directly with its new archrival, Apple.
The deal, worth $12.5 billion, still needs a few more regional approvals but has cleared the biggest hurdles. It would bring Google 19,000 new employees, the lower margins of a manufacturing enterprise, and the challenge of extending its very successful cellphone software business.
Google’s Android operating system is in more than four out of 10 new smartphones, but the dominant single company in the industry remains Apple and its iPhone. Google is likely to use Motorola to show other Android makers how it thinks phones should be built — by, for instance, more tightly integrating such Google-centric features as Google Wallet.
Approval of the deal had been widely expected. The only discordant note: Europe warned that Google should play fair in markets for smartphones and tablet computers. Google shares rose $6.29 Monday to close at $612.20.
The Justice Department separately announced that it was closing three investigations at the same time: Google’s purchase of Motorola; the purchase by Apple, Microsoft, and Research in Motion of certain patents from the bankrupt Nortel Networks; and Apple’s purchase of certain Novell patents.
The purchases are “unlikely to substantially lessen competition,” the Justice Department said in a statement.
Barclays Capital, in a report on Google released on Monday, said that Motorola’s mobile devices business was probably losing market share, but that its extensive patent portfolio would allow Google to better protect Android. It also will give Google access to the living room through Motorola’s set-top box business. Google is already working on a home entertainment device.
The deal comes at a time of heightened scrutiny by regulators over ownership of intellectual property governing computers and mobile communications.
Joaquin Almunia, the European Union competition commissioner, indicated in a statement that he would be watching the sector. The decision “does not mean that the merger clearance blesses all actions by Motorola in the past or all future action by Google,” the statement said. He added that any action on “the question whether Motorola’s or Google’s conduct is compliant with EU antitrust law” would be taken separately.