Google has announced that it will acquire  mobile handset producer Motorola Mobility for US$12.5 billion (AUD$12.06).


The acquisition will place Google in the mainstream handset-producing market,  in direct competition with Microsoft and Apple.


Google offered  $US40 per share in cash for Motorola, representing a 63 per cent premium of the company’s latest closing price. The deal is subject to regulatory approvals in the US, the European Union and other jurisdictions, and the approval of Motorola Mobility’s stockholders, and is expected to be closed by the end of the year or early 2012. The acquisition will be Google’s largest hardware purchase, and will solidify its Android operating system’s increasing market share.


Google’s acquisition of Motorola comes as recent research conducted by Katnar’s ComTech WorldPanel reveal that the Android platform has overtaken Apple’s iOS in smartphone sales.