The European Commission has cleared Google's $12.5 billion cash bid for Motorola Mobility. Now the search giant is waiting on Justice Department approval in the U.S.
Google (NASDAQ:GOOG) jumped a crucial regulatory hurdle
Feb. 13, as the European Commission approved the company's $12.5 billion
acquisition bid for Motorola Mobility (NYSE:MMI) because it did not believe the
deal would pose antitrust concerns in the mobile market.
Google in August 2011
agreed to buy Motorola for $40
per share in cash, a 63 percent premium. Motorola makes Android smartphones, tablets, mobile
peripherals and set-top boxes for IPTVs.
While Google described the deal as way to "supercharge
Android,"
Motorola also owns over 17,000 patents, with some 7,500 more pending approval.
"We have approved the acquisition of Motorola
Mobility by Google because, upon careful examination, this transaction does not
itself raise competition issues,"
wrote JoaquÃn Almunia, the European Commission's vice president in charge of
competition policy, in a statement.
"Of course, the Commission will
continue to keep a close eye on the behavior of all market players in the
sector, particularly the increasingly strategic use of patents."
Google last week pledged to honor Motorola's fair and
reasonable approach to licensing its patents, but it could use these patents to defend itself from the raft of patent-infringement lawsuits lobbed by Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and
others.
Apple and Microsoft have at one point both sued Samsung, HTC and Motorola for patents related to Android-based products, with Microsoft striking licensing deals with several vendors.
How these companies use the patents in legal and strategic warfare
continues to be a concern for regulators. The Commission vowed to keep an eye
on this issue.
The key factor on which the Commission based its decision
is that Google relies on Android to push its online content and services to as
many users as possible, and therefore wouldn't prevent Motorola rivals such as
Samsung or HTC from using Android.
Interestingly, Almunia also noted that the EC's clearance
"does not mean that the merger clearance blesses all actions by Motorola
in the past or all future action by Google with regard to the use of these
standard essential patents."
FOSS Patents blogger and IP expert Florian Mueller noted in a statement: "This
means the European Union's antitrust arm expressly reserves the right to
investigate, and potentially penalize, any past and future actions by the
combined entity, or any of its parts, with standard-essential patents."
Google had hoped to close the Motorola deal by the end of
2011 or early 2012, but it's been held up by regulatory reviews in Europe and
by the U.S. Justice Department. The wait in Europe is over, though the DOJ has
yet to provide its okay.
"This is an important milestone in the approval
process and it moves us closer to closing the deal,"
wrote Don Harrison, vice president and deputy general counsel, in a corporate
blog post. "We are now just waiting for decisions from a few other
jurisdictions before we can close this transaction."
With the EC granting Google passage, it's likely the DOJ will offer its own this week or next.
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