Google upped its bid for Motorola by $3B in one day to close dealIn order to secure its purchase of Motorola and the company's collection of patents, Google outbid itself by 33 percent, or $3 billion, in a single day to reach an agreement.
Google's aggressive strategy to acquire Motorola was revealed in filings made with the U.S. Securities and Exchange Commission this week. In detailing Google's bidding strategy, The Wall Street Journal noted that the extra $3 billion paid "underscores the pressure the search giant was under to beef up its patent portfolio and protect its promising Android smartphone franchise from a growing number of legal challenges."
Google initially offered $30 per share on Aug. 1, but Motorola rejected the offer and suggested a price of $43.50. Then on Aug. 9, Google offered $37 a share, while Motorola asked for $40.50.
On that same day, Google again upped its bid to $40 per share, increasing its standing offer by $10 per share in a single day. On Aug. 15, Motorola agreed to Google's offer, and a sale price of $12.5 billion was formally announced.
Google's massive bid increase came in spite of the fact that the search company was the only party in talks with Motorola. The maker of phones like the Droid Bionic and Atrix 4G, both of which compete with Apple's iPhone, opted to negotiate exclusively with Google.
According to the Journal, Motorola's board decided that talking only with Google would be advantageous, because a public auction wasn't expected to result in a higher price, while a failure to sell would be "highly detrimental" to the company.
Speaking out on the deal, Google Chief Executive Larry Page said in August that he feels "anticompetitive" patent litigation on the parts of Apple and Microsoft deemed the proposed purchase of Motorola necessary. The Google-Motorola deal must still be granted regulatory approval before it can be finalized.
The acquisition of Motorola gives Google some 17,000 issued and 7,500 filed patents, which some believe will give the search company more leverage in the lawsuit-saturated Android landscape. A number of those lawsuits are between Motorola and Apple, with each accusing the other of patent infringement.
Just days after the Google-Motorola deal was announced, Apple Chief Financial Officer Peter Oppenheimer commented on it with: "$12.5 billion is a lot of money." Apple, in its history, has not engaged in the type of blockbuster acquisitions taken on by Google, and none of Apple's purchases have crossed even a half-billion dollars.