Google buys Motorola Mobility around $12.5bn

NEW YORK: Google Inc said it will buy Motorola Mobility Holdings Inc for about $12.5 billion in cash in a move to bolster the adoption of its Android mobile phone software.

Google said it would pay $40 per share, a 63 percent premium to Motorola Mobility's Friday close on the New York Stock Exchange. Motorola Mobility shares jumped 59 percent in premarket trade on Monday.

Google, maker of the Android mobile phone operating system software, has been forging ahead in the smartphone market but has been hampered by a lack of intellectual property in wireless telephony.

Earlier this month, fresh from losing a bid to buy thousands of patents from bankrupt Nortel, Google Chief Legal Officer David Drummond blasted Microsoft, Apple, Oracle and "other companies," accusing them of colluding to hamper the increasingly popular Android software by buying up patents.

Google said the deal will close by the end of 2011 or early in 2012 and that it will run Motorola Mobility as a separate business.

Copyright Reuters, 2011