GOOGLE will be forced to pay Motorola a staggering $2.5bn (£1.5bn) if it fails to clear regulatory hurdles with its $12.5bn takeover bid.
The mammoth break fee represents 20 per cent of the proposed price, compared to AT&T’s fee of $3bn in its planned $39bn takeover of T-Mobile USA, which is just seven per cent.
If Motorola pulls out of the transaction it will be liable to pay Google $375m.
Google’s bid, which is driven by a desire to take control of Motorola’s portfolio of 17,000 patents, already comes at a premium of 63.5 per cent to Motorola’s pre-bid closing price.
The deal will catapult Google to the top of the pile in the patent arms race, which has become increasingly intense in recent months, with handset manufacturers threatening a litany of costly and time consuming lawsuits against each other.
Meanwhile, Nokia chief executive Stephen Elop has warned that other handset manufacturers could be disadvantaged as a result of the bid.
He said: “If I happened to be an Android manufacturer or an operator, or anyone with a stake in that environment, I would be picking up my phone and calling certain executives at Google and saying ‘I see signs of danger ahead’.”
Nokia rejected Google’s Android software to work exclusively with Microsoft’s WP7 earlier this year.