Google Sweetens Deals For On2 Technologies Acquisition

Google Inc. has finally bowed to On2 Technologies shareholders complaining about the original price it was offering for the acquisition of the online video specialist.

It will therefore raise its bid for the proposed takeover announced around five months ago.

In its latest sweetener to stockholders, the search engine bellwether has announced that it is pouring extra cash that would enhance the merger value up by 20 percent of the original sum; this pushes the On2 price to $134 million from the initial bid of $106 million.

However, Google said that this would be the last offer it is making for the acquisition of the video compression company.

Under the restructured terms, Google will be raising its offer by $0.15 per share, and forking up 0.0010 of a Google’s Common Stock Exchange share for each On2’s common stock share.

The companies asserted that it was an essential adjustment, as the value of Google stock had boosted significantly from August when the offer was made, while its offer for the acquisition of On2 remained unchanged.

Persuading shareholders for accepting the revised offer, On2 said "On2's board of directors approved the amendment to the merger agreement, and recommends that On2's stockholders approve the amended merger agreement and the merger proposal".

The final decision about the merger will be taken at a meeting in the month of February.

Our Comments

On2 Technologies possibly owns patents that could be instrumental in saving tens of millions of dollars every year simply by cutting on the cost of bandwidth. Youtube would almost certainly be the first service to benefit from the integration of On2.

Related Links

Google ups offer for On2 Technologies


Google ups final bid for On2 to sway shareholders

(Venture Beat)

Google sweetens bid for On2, shares up


Google Amends Financial Terms In On2 Technologies Merger Pact

(The Wall Street Journal)

Google sweetens offer for On2

(The San Francisco Chronicle)