The emergence of regulatory documents surrounding the Google purchase of Motorola Mobility brings new details about that deal. One point includes the fact that Google’s original offer was $30 per share which means the final offer of $40 per share was a 33% jump or about $3 billion. That, my friends, is not chump change.
Cnet details that the Securities and Exchange Commission (SEC) documents that have been filed show the timeline of Google’s offers, Motorola’s replies, and the final offer. According to these SEC docs Google contacted Motorola back in July to discuss their response to purchases by Microsoft, Apple, RIM, and other companies of Nortel’s patent portfolio.
Google has been claiming for months that the purchase of these patents was proof that “companies, including Microsoft and Apple, are banding together in anti-competitive patent attacks on Android.” These SEC documents seem to confirm that what Google voiced publicly was also voiced behind the scenes to Motorola executives.
The SEC filing by Motorola demonstrates that it wasn’t Google’s intention to simply whine about this injustice. The documents indicate that executives at Google and Motorola were discussing ways to protect themselves in the wake of these patent buy ups. One of the most notable “strategic options” by Motorola was for Google to buy the company.
The filing then goes on to detail the process by which Google bid on Motorola and the two companies came to agree on an acceptable offer. On August 1 Google made an offer of $30 per share to which Motorola responded, 4 days later, with an counter of $43.50 a share. Google wasn’t having that and countered back with $37 a share on August 9.
When Motorola CEO Sanjay Jha hinted to Google that he would push on the board to reject that deal Google bumped the price to $40 a share which Motorola’s board was happy to accept. That means Google wanted to spend about $3 billion less on Motorola than the final agreed upon offer.
What’s more interesting the filing details that even if the deal doesn’t go through, Motorola stands to make some cash.
“Google would be required to pay Motorola Mobility a termination fee of $2.5 billion and that under certain circumstances if Google breached its obligation to use reasonable best efforts to obtain necessary antitrust clearances, Motorola Mobility may be able to seek additional damages from Google in an amount equal to $1 billion, in addition to the reverse termination fee of $2.5 billion."
The last bit of details in this filing brings to light the reason Motorola didn’t seek other offers. Apparently the board believed that there was a risk of not getting a better deal. Furthermore the deal with Google could be broken if a better offer was received so Motorola had nothing to lose by sticking with Google from the get go.
For Google to spend $3 billion more than they originally offered demonstrates the importance of getting the patents from this Motorola Mobility deal to protect Android. Time will tell if this pays off and if it does will it pay off to the tune of $3 billion extra.
