Google to cough up $2.5 billion if Motorola deal falls through

Google has agreed to pay Motorola Mobility $2.5 billion if its planned acquisition of the cell phone vendor fails to close, Bloomberg claims. The report cites an anonymous source as having revealed the figure, which Bloomberg says is more than six times the typical breakup fee for such deals. Google announced on Monday that it plans to acquire Android smartphone and tablet vendor Motorola Mobility for $12.5 billion. While the proposed deal would give Google complete control over future Android device experiences, it would also add approximately 25,000 patents to the tech giant’s portfolio as it prepares to do battle with the likes of Apple and Microsoft. These patents are seemingly so important to Google that it is willing to part with a massive sum should its acquisition fail to get necessary approval. “A high reverse breakup fee shows the buyer’s confidence of getting the deal done,” Donna Hitscherich, a senior lecturer in finance at Columbia Business School, told Bloomberg. “People don’t do deals to get the breakup fee, they do them to get the deals done.”

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Tags: Acquire, acquisition, Android, Deal, google, Motorola, Motorola Mobility

Zach Epstein