Questions from text book Mergers, Acquistions and Other Restructuring Activities

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Questions from text book
Mergers, Acquistions and Other Restructuring Activities, 7th Edition
ISBN-13: 9780123854872
Author(s): DePamphilis, Donald
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Case Study 1.1 Google Acquires Motorola Mobility in a Growth-Oriented as well as Defensive Move

Discussion Questions:
1: In What sense is Motorola Mobility's role in this transaction unclear? Identify sources of synergy between Google and Motorola Mobility. What factors are likely to make the realization of this synergy difficult? Be specific.

2: Using the motives for mergers and acquisitions described in Chapter 1, which do you think apply to Google's acquisition of Motorola Mobility? Be specific

3: Speculate as to why the share price of Motorola Mobility did not increase by the full extent of the premium and why Google's share price fell on the day of the announcement.

4: Speculate as to why the shares of other handset manufacturers jumped on the announcement that Google was buying Motorola Mobility. Be specific.

5: How might the growing tendency for technology companies to buy other firms' patents affect innovation? Be specific.

Explanation / Answer

1)

The acquisition of motorola  mobility positions Google showing its desires to enter in wireless devices market.  At the same time  Motorola has been struggling to increase hand set shipment, these transaction is unclear,why because Google have mobile partner like Samsung, LG, Sony, now it is competitor for them.

Google is not new for the world, it is old and having popularity logo, it thought entering into new world such as mobile world with motorola, motorola is also struggling to selling the hand set joined as together they can achieve more better than before.

Patent rights and law suit having a difficult for both.(Google and Motorola,)  

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2)

No, why because  motives for mergers and acquisition is to having significance in revenue growth and cost saving.

In this case study, i don’t find  revenue growth and  cost saving because both have to spend the patent rights and law suit expenses.

Google partner are converted as semi - competitor. Now they can be advertise in google that to increase 18% . In future the same situation may or may notbe continue . If it is not continued it is huge loss for Google

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3)Already Motorola having problem with microsoft patent rights and Google is a android provider, difference in there products platform

Difference is joining as one, Google share price is gone for low

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4) Because other competitors become dependent of google, Google is Android provider, it is providing for samsung, sony, LG, If it is entered into mobile hand set making world, how it can give andriod support for its competitors. So google have the rights to stop or not for other hand set manufacturer, if it is stop there is no use of buying other hand set. Share price jumped .

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