Google shocked the tech world last year when they announced that they would acquire Motorola Mobility for $12.5 billion. Shareholders already approved the deal and many in the industry assume it will go through, but there are still a few hurdles left to clear before it becomes official. Motorola provided an update on the progress in yesterday’s earnings report.
In order to be approved antitrust clearances, or waiting period expirations, are required by the U.S. Department of Justice, European Commission, Canada, China, Israel, Russia, Taiwan and Turkey.
So far, clearances have only been received from Turkey and Russia. The waiting period has expired in the United States and Canada, but Motorola has been informed that the reviewing agencies have not finished their investigations. The Chinese Ministry of Commerce announced in December that they have moved on to phase two of its investigation.
Motorola “expects the transaction to close in early 2012″ but notes that “factors outside the company’s control” could “delay or prevent completion of the transaction altogether.”
The biggest obstacle to completing the transaction could come from Europe where consumer groups are urging the European Union to block the merger. Consumer Watchdog, a US-based advocacy group, has written a letter [.pdf] to the EU asking them to stop the deal.
Parts of the letter read, “Allowing the Motorola Mobility deal would provide Google with unprecedented dominance in virtually all aspects of the mobile world – manufacturing, operating systems, search and advertising. It would be a virtually unstoppable juggernaut. We urge the Commission to block the proposed $12.5 billion deal.”
Not only does the letter ask the EU to block the merger, but it also calls for an investigation into the Google’s alleged anti-competitive practices.
If you are not familiar with Consumer Watchdog, they have accused Google of engaging in “close relationships” with the U.S. governement and produced several videos attacking former Google CEO, Eric Schmidt.
The EU Commission was originally supposed to make a decision on the merger by January 10th, but that deadline was extended to February 13th after Google submitted additional documents to support its case.
At this point I doubt the deal will get killed, but anything is possible. There was a time when we thought that AT&T’s acquisition of T-Mobile was certain, and look how that turned out.
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