Google Inc. said Monday it will pay $12.5 billion for Motorola Mobility, a major maker of phones using Google's Android mobile software. The deal includes mobile patents that could help Google defend itself against rivals.
S&P said that while the acquisition would include a patent trove, that might not be enough to keep Google's Android mobile operating software from encountering intellectual-property issues. It downgraded its rating on Google's shares to "Sell" from "Buy."
Further, the ratings service says the transaction will hurt Google's growth, margins and balance sheet.
S&P cut its price target for Google's stock by $200 to $500.
