Google Inc. Monday announced that it has agreed to buy Motorola Mobility Holdings Inc. for about $12.5 billion, the largest purchase for the Internet search giant that will allow it to compete directly with other mobile phone makers, Xinhua reported.

Google said that it will acquire Motorola Mobility for $40 per share in cash, or a total of about $12.5 billion, a premium of 63 percent to the closing price of Motorola Mobility shares last Friday.