Google has made a bid to take over Motorola Mobility for $12.5 billion. The deal needs to be approved by regulatory bodies in the United States, European Union and other areas, as well as by Motorola shareholders. The deal values shares at $40 each. Motorola would be administered as a separate company from Google, and license the Android platform in the same way that other companies currently do.
Motorola split into two companies earlier this year, with Mobility developing and manufacturing in the wireless industry and Motorola Solutions working on wider technologies aimed at governments and corporations. Google is only seeking to acquire the former.

This is exactly what the largest shareholder, Carl Icahn, has been urging Motorola to do for some time. He wants the company to capitalize on the surge in interest for wireless technology and patents. Icahn holds 11.36% stake in the company.

Should it go through, the acquisition would put Google’s Android platform in direct competition with Apple’s iPhone, Microsoft and RIM’s Blackberry. This may scare other wireless hardware providers who use Android as the operating system on their phones. Google says that Android will remain free and accessible to all those who want to use it as a platform. This is a marked deviation from the general Google business plan which has in the past centred on the internet and social media. Android controls 43.4% of the market for smartphone platforms, with Nokia’s share at 22% and Apple’s at 18%.

Google will also acquire Motorola’s set-top box businesses, which will bolster its young television department.

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