May 21, 2014, 7:26 AM — Google plans to spend US$20 billion to $30 billion of its of its accumulated international profits to fund potential acquisitions of non-U.S. companies and technology rights.
The company disclosed its plans to the U.S. Securities and Exchange Commission (SEC) last year, in a document that was published Tuesday. The SEC had asked Google to describe its plans for reinvesting its undistributed earnings in greater detail.
In 2012, Google generated about half its revenue in non-U.S. markets. It said it will continue to use a substantial part of the profit from that business to acquire non-U.S. companies. The alternative, repatriating those earnings to the U.S., could expose it to a significant tax bill.
It plans to do so because its global business has expanded into other product offerings such as mobile devices, where its competitors and business partners are no longer primarily U.S.-based multinationals, Google told the SEC.
Over the past few years, Google has completed significant acquisitions with an increasing individual deal size, a trend that is likely to continue in future years, it said.
The company spent about $1.4 billion on more than 20 strategic deals in 2013, including the $1 billion acquisition of Waze, an Israeli navigation app developer, in June last year. Waze's navigation app lets users share information on obstacles along their routes to give other users real-time information about police checkpoints and accidents.
Google continued its non-U.S. acquisition spree this year. In January it acquired the London-based artificial intelligence company DeepMind Technologies for a reported $400 million. In February it acquired London-based ad fraud detection technology specialist Spider.io. And earlier this month, Google bought U.K. retail start-up Rangespan.
Google also "recently pursued but discontinued a potential buyout of a foreign company, with a valuation estimated in the range of $4 to $5 billion," it said, without naming the company. A Google spokesman declined to answer questions about the identity of that company or other acquisition targets.