jueves, 30 de enero de 2014

Google buys Motorola, Google sells Motorola

Image from phandroid
August 15th, 2011. Google pays $12.5 billion for Motorola Mobility. Forbes' headline was Google Buys Motorola For Patent Parts

But, when Motorola was acquired they had $3.2 billion in cash and $2.4 billion in deferred tax assets. That means the net acquisition price was $6.9 billion.

December 11th, 2012. Google sells Motorola's factories in China an Brasil for $75 million to Flextronics.

December 20th, 2012. Google sells Motorola's set-top business for $2.35 billion to Arris.

January 29th, 2014. Google sells Motorola Mobility to Lenovo for $2.91 billion.

At this point the operation costed Google $1.565 billion

In this period of time Motorola accumulated operating losses for around $1.974 billion ($233$527 + $353 + $271 + $342 + $248) [Google's Q4 results are not out yet].

That means the whole Motorola operation costed Google $3.539 billion.

What has Google acquired with $3.539 billion? 
A set of patents valued in September 2012 at $5.5 billion. (update 19/May/2014 - patents that were used to settle 20 patent suits with Motorola). That would mean $2 billion profit in the operation.

But, in addiction to those patents, Google is keeping Motorola's Advanced Technology and Projects group. That is a group of 100 engineers working in projects like Ara, the modular phone and Tattoo.

Now have a look at how the M&A market is in the IT industry and tell me whether or not this was a good deal.

Take care
Javier Arias González