By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Google Inc. shook up the tech
sector Monday, saying it would acquire Motorola Mobility Holdings
Inc. for $12.5 billion in a bid to secure a slate of wireless
patents and increase the market position of the Android operating
system.
Motorola's (MMI) shares climbed by $13.90, or almost 57%, to
$38.36 after the cash acquisition was announced. The deal values
Motorola at $40 a share -- a 63% premium over the stock's closing
price last Friday.
The deal comes just eight months after Motorola split into two
separate companies: Motorola Mobility, which is responsible for
smartphones and consumer products, and Motorola Solutions Inc.
(MSI), which took over the old Motorola's business and networking
product lines.
Shares of Motorola Solutions added a little more than 1% in
morning action.
However, shares of Google (GOOG) gave up $5, slipping to $558.58
after the deal's announcement.
Among other tech stocks, IBM Corp. (IBM) was up $3.57, or 2%, to
$171.71 after Goldman Sachs analyst Bill Shope raised his rating on
the tech giant to buy from neutral, and lifted his price target to
$195 a share from $170. Shope cited IBM's diversified business
portfolio among the reasons for his upgrade.
Dell Inc. (DELL) was up by 43 cents, or almost 3%, at $15.31, a
day ahead of the PC company's quarterly financial results.
The Nasdaq Composite Index (RIXF) rose 32 points to 2,540, while
the Morgan Stanley High Tech 35 Index (MSH) and the Philadelphia
Semiconductor Index (SOX) both rose 1.3%.