Google (GOOG) to takeover Motorola Mobility (MMI) vs Apple (AAPL) and Nokia? | Handset and Android development | Financial Mergers

Google Inc. (GOOG) decided to takeover Motorola Mobility Holdings Inc. (MMI) for about $12.5 billion in cash, allowing the creator of the fast-growing Android mobile operating system to build its own smartphones and tablets and providing patents to defend against a rash of lawsuits.

 

Google and Motorola

The move gives Google a hardware platform, but more importantly patent protection for key aspects of the Android operating system.

Android is only part of the transaction. Motorola Mobility also has a set-top box division, one that has been competing with Cisco’s (CSCO) Scientific Atlanta, among others. Set-top boxes are destined to join DVD’s in the dustbin of history, but the patents Google is acquiring may give them a fighting chance in the long-envisioned marriage between the televisions and the Internet.

if Motorola were to decide not to go through with the deal, it would have to pay Google a $375 million break-up fee which represents 3 percent of the deal valuation of $12.5 billion.

Google said it would pay $40 per share in cash, a 63 percent premium to Motorola Mobility’s Friday closing price on the New York Stock Exchange.

Fundamentally, Motorola has never been an interesting stock. Only consolation is its low P/BV even if its stock price has currently surged more than 50% after the announcement.

20110815 - Price to Book Ratio (Google and Motorola Mobility) 1

 

20100815 - Key Performance Stats (Google and Motorola Mobility 2

For Google (GOOG), its PE ratios are non-demanding, but not the cheapest too. Balance sheet is strong and Google may not even activate any debt.

20110816 - Key Performance Stats (Google and Motorola Mobility 3)

 

Balance Sheet

Cash and ST Investments 39.12B
Book Value per Share 161.34
Current Ratio 5.96
Book Value 51.99B
Book Value per Share 161.34
Long Term Debt 2.98B
Debt to Equity Ratio 0.06
Total Assets 64.86B

Now the other question is – Will Microsoft (MSFT) takeover Nokia Oyj or RIMM?

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General disclaimer : The author has based this post on information obtained from sources which he believes to be reliable. He does not make any representation or warranty nor accept any responsibility or liability as to its accuracy, completeness or correctness. This post is not intended to be an offer, or the solicitation of any offer, to buy or sell the securities referred to herein.

 

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