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M&A LAW NEWS: Google in Aquisition Deal with Motorola

Tuesday, 16 August 2011 15:00

Google has just announced that it has secured a US $ 12.5 Billion deal for the acquisition of Motorola rendering it now also a cellphone manufacturer thus allowing an excellent platfrom for its already popular Android Operating System launched in 2007 and which is currently used by approximately fourty per centum (40%) of smartphones users to access the internet. Although Google has expressed its intention to run Motorola as a seperate business, Google is definitely deemed to be creating a direct challenge to Apple's i-Phone also launched in 2007.

The proposed acquisition could lead to certain negative reactions from other leading cellphone manufacturers such as Samsung and HTC. Indeed, HTC enjoys fourteen per centum (14%) of the Google's Android Operating System enabled smartphones market against the eight per centum (8%) enjoyed by Samsung.

The deal must first be approved by the U.S. Federal Trade Commission which is already investigating Google's dominant position on the relevant market. Observers did not exclude that the the proposed deal would be also scrutinised by the European Commission. However, Google expressed its full confidence that the proposed acquisition would ultimately improve competition in the smartphone market and therefore, would be approved by the Competition authorities.