Yesterday, Google announced it was trying to purchase Motorola Mobility for $12.5 billion. I try “trying” because the deal is not done yet. With acquisitions this massive, the two companies must get the approval of regulatory committees and stockholders. If for any reason the deal falls through, Google will owe Motorola Mobility $2.5 billion.
According to Bloomberg, Google and Motorola haven’t publicly revealed this detail. The breakup fee is said to be so unusually massive because Google is confident the deal will go through.
By comparison, Motorola Mobility only has to pay $375 million if it wants to back out of the deal with Google. If successful, the acquisition is expected to be completed by early 2012. Motorola will still be run separately from Google and will not be the sole maker of Google’s Nexus-branded devices.