Reverse break-up fee is 20 per cent of deal

Google would pay Motorola $2.5bn to walk - source

Google would pay Motorola $2.5bn if it walked away from the proposed $12.5bn acquisition deal, a source has said.

The source said the reverse break-up fee represents 20 per cent of the total size of the deal, announced earlier today.

However  if Motorola were to decide not to go through with the deal, it would have to pay Google a $375 million break-up fee, the source added.

That represents three percent of the deal valuation of $12.5 billion.

Google wants to buy phone hardware maker Motorola to bolster adoption of its Android mobile software and compete with smartphone rival Apple.

In its biggest deal to date, Google said it would pay $40 per share in cash, a 63 per cent premium to Motorola Mobility's Friday closing price on the New York Stock Exchange.

Lazard advised Google on the deal, while Motorola used Centerview Partners and Frank Quattrone's Qatalyst Partners, sources told Reuters.

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