Google has acquired Motorola Mobility Holdings for 12-and-a-half billion dollars.

Google and Motorola announced on Monday that with the takeover, Motorola shareholders will get 40 dollars a share in cash, or 63 percent more than Motorola Mobility’s closing price on the New York Stock Exchange on Monday.

Motorola manufactures mobile phones that operate on Google’s Android software.

Amid fierce competition over patents with competitors, including Apple and Microsoft, Google said that it decided to acquire Motorola, which possesses a large number of patents, in order to protect its Android software. Google said it will continue to provide the Android operating system for free.

Other firms in the Android industry, including Samsung, have hailed the recent acquisition.

With Google now set to take part in the production of smartphones, the recent takeover is expected to have a significant impact on the world mobile phone market.