Chinese regulators drag heels on Google-Motorola deal

Google's $12.5 billion offer to acquire Motorola Mobility faces a hurdle in China, which has extended its investigation into the proposed merger.

Google's bid to buy Motorola Mobility is still on hold as Chinese regulators expand their scrutiny of the deal.

A regulatory filing from Motorola confirmed the news earlier this week, explaining that China's Anti-Monopoly Bureau has extended the second phase of its investigation.

No reason was given why China is dragging its heels.

Motorola said that it and Google continue to work closely with the Anti-Monopoly Bureau to complete the investigation. The two companies still expect the deal to be finalized during the first half of 2012. But Motorola added that neither it nor Google can provide any assurance as to when or if the deal will be approved by Chinese regulators.

China is the last holdout in OK'ing the $12.5 billion merger , which has been approved by the U.S. Justice Department , the European Union , and other key regulators.

Google is counting on the deal to acquire Motorola's 17,000 patents to use as ammunition in any legal battles with Apple and other rivals. Apple has been involved in a series of patent suits with Samsung, HTC, and Motorola over claims that Android devices are infringing on its own iPhone and iPad. Google has previously stated that it would defend HTC and its other Android partners in their legal skirmishes with Apple.

Initial questions were raised over whether Google would license Motorola's patents to the competition on reasonable terms, a key concern among both the Justice Department and the EU.

In response, Google issued a letter promising that it would adhere to fair standards in licensing those patents. Though the Justice Department and the EU have approved the deal, both have said that they would keep an eye on Google to make sure the company honors its promise.

Motorola responded to CNET's request for comment by quoting from its regulatory filing.

A Google representative confirmed the news and also touted the deal in the following statement sent to CNET:

"We continue to await regulatory approval in China and to work closely with regulators. We are happy to answer their questions and discuss any concerns. Google and Motorola Mobility together will enhance competition in mobile computing, offering consumers faster innovation and a wider range of choices."

Updated 7:40 a.m. PT and 8:30 a.m. PT with responses from Motorola and Google.

 

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