$2.5 billion Google-Motorola break-up fee

Interesting analysis on Google's Motorola acquisition, based on a detail of the deal that has not been widely reported.

Florian Mueller:

It takes an unusual combination of two factors that companies agree on such an extraordinary break-up fee:

There must be a buyer who, besides having deep pockets, must be completely desperate. Otherwise the seller can't possibly command such terms.

But sellers don't ask for terms only because they can. If sellers don't have profound concern over the probability of the deal going through, they don't insist on an enormous break-up fee simply because it then makes more sense for them to optimize other deal terms than this particular one.