Google announced today that it would acquire mobile phone handset firm Motorola Mobility for about $12.5bn in cash. It is Google's biggest takeover deal so far.

The deal gives Google, the developer of the Android mobile operating system, which it has popularised by licensing it free of charge to mobile phone makers, a hardware operation, that will enable it to challenge rivals such as Apple.

It also gives Google access to a large amount of patents that it will be able to use to defend itself amid an increasing fierce war over intellectual property among technology companies.

As of June 30, 2011, Google had cash, cash equivalents, and marketable securities valued at $39.1bn.

Larry Page, Google CEO, said  that since its launch in November 2007, Android has not only dramatically increased consumer choice but also improved the entire mobile experience for users. Today, more than 150 million Android devices have been activated worldwide - -  with over 550,000 devices now lit up every day - - through a network of about 39 manufacturers and 231 carriers in 123 countries. "Given Android’s phenomenal success, we are always looking for new ways to supercharge the Android ecosystem. That is why I am so excited today to announce that we have agreed to acquire Motorola."

Motorola has a history of over 80 years of innovation in communications technology and products but has failed to establish a significant presence in the mobile market.

Larry Page added: "This acquisition will not change our commitment to run Android as an open platform. Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business. Many hardware partners have contributed to Android’s success and we look forward to continuing to work with all of them to deliver outstanding user experiences.

We recently explained how companies including Microsoft and Apple are banding together in anti-competitive patent attacks on Android. The US Department of Justice had to intervene in the results of one recent patent auction to 'protect competition and innovation in the open source software community' and it is currently looking into the results of the Nortel auction. Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies.

The combination of Google and Motorola will not only supercharge Android, but will also enhance competition and offer consumers accelerating innovation, greater choice, and wonderful user experiences. I am confident that these great experiences will create huge value for shareholders."