Bloomberg News

Google’s Motorola Takeover Faces Longer Antitrust Scrutiny

September 28, 2011

(Updates with Admeld deal in eighth paragraph.)

Sept. 28 (Bloomberg) -- Google Inc. and Motorola Mobility Holdings Inc. received a request for additional information from the U.S. Department of Justice’s antitrust division, lengthening the review of the search giant’s proposed takeover.

The companies intend to “fully cooperate” and “respond expeditiously” to the Justice Department, according to a regulatory filing by Motorola Mobility. Google’s acquisition of the company, first announced in August, is expected to close by the end of this year or in early 2012.

“While this means we won’t be closing right away, we’re confident that the DOJ will conclude that the rapidly growing mobile ecosystem will remain highly competitive after this deal closes,” Google said in a blog post. “We’ll be working closely and cooperatively with them as they continue their review.”

Google, which makes the Android mobile-phone operating system used by Motorola Mobility, is counting on the $12.5 billion deal to bolster its intellectual-property holdings and expand its reach in the mobile industry. Motorola Mobility has more than 17,000 patents that Google can use in its legal tussles with rivals such as Apple Inc.

Google said the Justice Department request is “pretty routine.” The so-called second request allows the agency to extend its review of the transaction.

Splitting Duties

While the Justice Department’s antitrust division reviews Google’s acquisitions for their possible effects on competition, the Federal Trade Commission is conducting a broader investigation of the company’s dominance of Internet search.

“We’re looking at the proposed transaction,” said Gina Talamona, a Justice Department spokeswoman. She declined to comment further.

The Justice Department is also reviewing Google’s proposed $400 million acquisition of Admeld Inc., an Internet advertising company that would help Google increase its share of the online ad market.

Google, based in Mountain View, California, fell $10.50 to $528.84 today on the Nasdaq Stock Market. The shares have declined 11 percent this year.

Motorola Mobility, located in Libertyville, Illinois, fell 14 cents to $37.90 on the New York Stock Exchange.

--With assistance by Sara Forden in Washington. Editors: Nick Turner, Jillian Ward

To contact the reporters on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net


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