Internet giant Google has announced a deal to buy Motorola Mobility for $12.5bn (?7.7bn).
A joint statement said the boards of both companies had unanimously approved the deal, which should be completed by the end of this year, or early in 2012.
Earlier this year, Motorola split into two separate companies.
Mobility develops and manufactures mobile phones, while Motorola Solutions covers wider technologies for corporate customers and governments.
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Analysis
image of Tim Weber Tim Weber Business editor, BBC News website
Google is making a high-stakes gamble in the global smartphone wars.
The search engine giant and developer of the Android operating system for mobile phones is gearing up for its confrontation with Apple and (to a lesser extent) Microsoft.
Google has suffered a number of mobile phone setbacks recently, most of them in patent courts. Motorola Mobility holds 24,500 patents, which should allow Google to imitate Apple's strategy of slowing down rivals by taking them to court for alleged patent infringements.
Google's problem is that buying Motorola leaves its other Android partners potentially high and dry. Will they get the same early access to the latest versions of Android? Will Motorola get that little bit extra when it comes to smartphone features?
Google has released statements from three Android partners supporting the deal. They're clearly written with clenched teeth. To handset-makers, Microsoft's new Windows Phone software will suddenly look quite attractive.
And it puts a question mark over Google's new boss Larry Page. Does he have no better use for the company's cash than buying a fickle hardware business? Is Google losing corporate focus?
Shares in Motorola Mobility jumped 57% in early trading in New York to $38.27, still below the offer price of $40 per share. Shares in Google fell slightly.
Meanwhile, Nokia shares jumped more than 10% on news of the deal, with renewed speculation that the Finnish mobile phone company could become a bid target itself.
BBC News - Google to buy Motorola Mobility for $12.5bn
A joint statement said the boards of both companies had unanimously approved the deal, which should be completed by the end of this year, or early in 2012.
Earlier this year, Motorola split into two separate companies.
Mobility develops and manufactures mobile phones, while Motorola Solutions covers wider technologies for corporate customers and governments.
Continue reading the main story
Analysis
image of Tim Weber Tim Weber Business editor, BBC News website
Google is making a high-stakes gamble in the global smartphone wars.
The search engine giant and developer of the Android operating system for mobile phones is gearing up for its confrontation with Apple and (to a lesser extent) Microsoft.
Google has suffered a number of mobile phone setbacks recently, most of them in patent courts. Motorola Mobility holds 24,500 patents, which should allow Google to imitate Apple's strategy of slowing down rivals by taking them to court for alleged patent infringements.
Google's problem is that buying Motorola leaves its other Android partners potentially high and dry. Will they get the same early access to the latest versions of Android? Will Motorola get that little bit extra when it comes to smartphone features?
Google has released statements from three Android partners supporting the deal. They're clearly written with clenched teeth. To handset-makers, Microsoft's new Windows Phone software will suddenly look quite attractive.
And it puts a question mark over Google's new boss Larry Page. Does he have no better use for the company's cash than buying a fickle hardware business? Is Google losing corporate focus?
Shares in Motorola Mobility jumped 57% in early trading in New York to $38.27, still below the offer price of $40 per share. Shares in Google fell slightly.
Meanwhile, Nokia shares jumped more than 10% on news of the deal, with renewed speculation that the Finnish mobile phone company could become a bid target itself.
BBC News - Google to buy Motorola Mobility for $12.5bn
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