Google-Motorola Deal Pending China Regulatory Approval
Google's $12.5 billion proposed takeover of Motorola Mobility has been cleared by government regulators around the world -- with the exception of China -- while the companies expect to close the deal in the first half of 2012.
"Motorola Mobility and Google continue to work closely with the authorities in China for approval on the acquisition," Motorola said in announcing financial results for the first quarter of 2012.
Google announced its plans to acquire Motorola Mobility on Aug. 15, 2011, for $40 per share in cash. The U.S. Department of Justice and European Commission approved the deal in February, although both said they would monitor Google's use of the 17,000-plus patent portfolio it stands to gain.
Google CEO Larry Page has said the company wants to obtain Motorola's patents to "better protect" the Android operating system for mobile devices from legal attacks by rivals including Apple and Microsoft. Google is reportedly looking to spin off the Motorola set-top box and video-infrastructure division once the deal goes through.
For the first quarter of 2011, Motorola Mobility posted sales of $3.1 billion, up 2% year over year, and a net loss of $86 million (28 cents per share) compared with a net loss of $81 million in the year-ago quarter.
Sales in Motorola's cable-focused Home segment fell 2% in the quarter, to $884 million, while operating earnings improved to $68 million versus $53 million in the year-ago quarter. The unit "delivered another solid quarter highlighted by improvement in year-over-year profitability," Motorola Mobility chairman and CEO Sanjay Jha said in a statement.
The Mobile Devices side of the house boosted revenue 3% to $2.2 billion, while the unit's operating loss increased to $121 million compared with an operating loss of $89 million in the year-ago quarter. The company shipped a total of 8.9 million mobile devices in the first quarter, including 5.1 million smartphones.
Motorola said that "in light of the pending acquisition of the company by Google," it no longer conducts a financial analyst conference call or webcast to discuss earnings, nor does it provide financial guidance.
Google would pay Motorola Mobility $2.5 billion if it terminates their merger agreement, while Motorola Mobility would owe the Internet giant $375 million if it accepted a higher takeover offer, according to regulatory filings.
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