China stalls investigation into Google, Motorola: Merger on hold

Summary:With one hurdle left, after the DoJ and European authorities accepted the deal, China is still causing headaches for Google in its proposed acquisition of Motorola Mobility.

Despite passing the U.S. Department of Justice and the European antitrust board, Google still has to jump through the hoops set out by the Chinese authorities before it can acquire Motorola Mobility for $12.5 billion.

The deal must pass in China for the acquisition to go ahead, or face pulling out of the country altogether. China is the last stop before the deal can formally go ahead.

But further delays are expected after the Chinese antitrust regulators added another round of investigations to the deal.

Tensions between Google and China remain fraught, a few years after Google famously pulled out of the country after it was hacked by the Chinese government --- an accusation it denies.

The second phase of the review could cause headaches to Google or Motorola. European authorities paused the investigation into the acquisition after it requested further details. But no further details were given as to why Chinese authorities entered the second phase of its investigation.

"Motorola Mobility and Google continue to work closely with MOFCOM [the Chinese regulator] to conclude its investigation and expect the transaction to close during the first half of 2012," Motorola said in its amended U.S. Securities and Exchange Commission filing.

But the two companies warned that: "Motorola Mobility and Google can provide no assurances as to whether or when the transaction will receive clearance by MOFCOM."

Despite concerns over patents, Google and Motorola must license Motorola patents on 'fair, reasonable and non-discriminatory' (FRAND) terms, and pledged to do so.

Google is set to receive over 17,000 patents to its portfolio in the acquisition.

Related:

Topics: Mobility, Banking, China, Google

About

Zack Whittaker writes for ZDNet, CNET, and CBS News. He is based in New York City.

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