Google’s Motorola Mobility Buy Awaits China’s Approval
Google’s (NASDAQ:GOOG) purchase of Motorola Mobility (NYSE:MMI), already approved by U.S. and European regulators, still hangs fire in China, where the authorities may play tit-for-tat by denying permission to the deal because Chinese companies have, in several cases, been denied approvals in the U.S.
An IT analyst said on condition of anonymity that what “China is extremely good at is identifying opportunities that can be leveraged as bargaining chips – Chinese companies have been rebuffed in a number of attempts to make acquisitions in the U.S. market. Any time China can be in an opposite position and say, ‘You had your concerns and shut it down’…This cuts both ways.”
A Chinese Commerce Ministry official said Thursday that the Ministry is reviewing Google’s $12.5 billion deal of Motorola Mobility. The review is considered a routine process, but Google may face “take-that” from the authorities due to its decision to relocate its search operations to Hong Kong in 2010.
However, an all-out refusal is quite unlikely, according to Edward Yu, chief executive of Analysys International, a technology and Internet consultancy in Beijing. “This year is quite sensitive, with a new lineup of leaders in the central government. I don’t think there will be anything extreme, warm or cold, or retaliation.”
Here’s how these stocks are reacting to the news:
Google Inc. (NASDAQ:GOOG): GOOG shares recently traded at $600.19, down $5.37, or 0.89%. They have traded in a 52-week range of $473.02 to $670.25. Volume today was 1,043,168 shares versus a 3-month average volume of 2,928,710 shares. The company’s trailing P/E is 20.21, while trailing earnings are $29.76 per share.
Motorola, Inc. (NYSE:MMI): MMI shares recently traded at $39.71, up $0.01, or 0.03%. They have traded in a 52-week range of $20.77 to $39.72. Volume today was 3,580,449 shares versus a 3-month average volume of 4,603,100 shares. The company’s trailing earnings are $-0.84 per share.
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