Google and Motorola Mobility today announced that they have entered into a definitive agreement under which Google will acquire Motorola Mobility for $40.00 per share in cash, or a total of about $12.5 billion, a premium of 63% to the closing price of Motorola Mobility shares on Friday, August 12, 2011. The transaction was unanimously approved by the boards of directors of both companies.

Larry Page, CEO of Google, said, “Motorola Mobility’s total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers.”

Though Google’s Senior Vice President of Mobile, Andy Rubin said that “our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community”, many Android handset makers will now be feeling uneasy.

Google has already given preferential treatment to some handset makers when new Android versions are launched. And with Motorola in their pocket, it is very likely that Motorola will get the first dig at new Android releases before others. Also there will be a whole new twist to Android related lawsuits.