NEW YORK (
said in a post today on its corporate blog that its $12.5 billion purchase of
has come under increased scrutiny by antitrust enforcers at the U.S. Department of Justice.
In the post, Google Senior Vice President Dennis Woodside said that as part of the merger process they have been talking to the Department of Justice since the merger was announced in August and that "Today we received what is called a "second request," which means that the DOJ is asking for more information so that they can continue to review the deal."
Woodside's post indicated that the deal to buy Motorola Mobility, the Schaumburg, Illinois based handset maker bought to continue Google's mobile communications push, may be delayed. When announced in August, the acquisition was expected to close later this year or at the beginning of 2012. According to Woodside, "this means we won't be closing right away, we're confident that the DOJ will conclude that the rapidly growing mobile ecosystem will remain highly competitive after this deal closes."
Woodside did call the second inquiry "routine" and mentioned that the Mountain View, California- based company has gotten similar requests from the DoJ before.
In 2010, Google received a second request from the Department, of one of the U.S.'s antitrust authorities along with the Federal Trade Commission when acquiring travel-data software company ITA Software for $700 million. Though the acquisition was opposed by
Bing, regulators gave the deal approval this August contingent on Google's continued licensing of ITA's products to other travel search competitors on "commercially reasonable terms."
Antitrust enforcers evaluate corporate mergers to see if they make markets too concentrated and limit competition, if they can foster unfair pricing advantages to consumers or suppliers, or if they create an overall consumer harm.
Recently, Google has also faced increased anti-trust scrutiny for its core search functions. Currently Google is the world's largest online search provider with over a 60% market share. Second-largest search provider currently commands less than 20% of the overall search market.
In today's blog post explaining the increased antitrust scrutiny of the Department of Justice, Woodside said, "we're confident that this deal will be approved. We believe very strongly this is a pro-competitive transaction that is good for Motorola Mobility, good for consumers, and good for our partners."
In a 8K filing with the Securities and Exchanges Commission, Motorola Mobility said, "The companies intend to cooperate fully and respond expeditiously to the DOJ. The transaction is currently expected to close by the end of 2011 or in early 2012."
said yesterday that it has hired
to help it defend itself from hostile takeovers and activist shareholders. The hiring of a takeover defense team was first reported by the
Wall Street Journal
The company is currently reorganizing after firing CEO's Mark Hurd and Leo Apotheker in the past year. Apotheker, earlier in the summer, put together an ambitious plan for the world's largest P.C. maker to spin its computers division and acquire British software giant Autonomy for $11.7 billion in a move towards a software services oriented business model. After the board approved the plan, last week it ousted Apotheker and replaced him with former
CEO Meg Whitman. The extent of H.P.'s new strategy to spin its computers and handset's divisions in favor of Autonomy's software capabilities or revert back to its traditional operating structure is yet to be fully determined under Whitman's leadership.
Hiring investment bankers like Goldman can help a struggling company like H.P. ward off acquirers, while it implements a new or more effective strategy. After
Macondo Oil spill in 2010, it was reported that the British oil giant hired Goldman to provide takeover defense while managing the largest oil spill in U.S. history. Goldman has also found takeover defense work from
Goldman may help in warding off a hostile bid for the Palo-Alto based computer maker, but it won't be as effective in stopping an activist shareholder from buying an equity stake in the company to influence its strategic direction, be that Apotheker's plan, a return to P.C. based operations or potential business sales. To ward off a hostile investor, H.P. could enact a shareholders rights plan, more widely known as a "poison pill" to make it tough for an investor to add enough of a new stake in the company to influence its direction.
Its board could also reject nominations of hostile shareholders as
did with a slate of directors nominated by activist investor Carl Icahn earlier this week.
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enacted a poison pill to fend off activist shareholder Sadar Bilgari, its largest shareholder, from increasing his stake in the company.
Shares of H.P. have fallen more than 40% over the last 12 months and it's the worst performer in the Dow Jones Industrial Average this year.
-- Written by Antoine Gara in New York
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