Google reported on Monday that the company has reached an agreement with Motorola to acquire the mobile and tablet maker for a sum of $12.5 billion. The company has offered a sixty-three percent premium on Motorola’s closing price on Friday.

Google will buy the shares at $40 per share in cash. Motorola is the exclusive shipper for phones and Xoom tablets using Google’s Android OS. The research vice president at Gartner, Carolina Milanesi said that with this acquisition Google now has a hardware manufacturer to work with its Android development.

According to Milanesi, Google also will be able to control Motorola’s excellent patent portfolio. The company reported holding roughly 24500 patents earlier in the year.

However, she said that this acquisition may create stress with some other mobile manufacturers, such as HTC and Samsung that use Android in their smart phones. From the time Google launched Android, the company has distributed the rights to various manufacturers while releasing the newer version. The other manufacturing companies are offered the code after the end of a six-month period.

Although, the acquisition may alienate other manufacturers, Milanesi feels that the other sellers have invested substantial amounts in the Android platform that will prevent these companies from moving away quickly.

According to Milanesi, Google must focus on speeding up the development of Android OS on the tablets. This is one sector that the company is lacking and requires catching up to keep up with the mobile phone market. According to reports, the next scheduled launch of the Android OS known, as Ice Cream Sandwich will be compatible with the tablets as well as mobile phones.

According to a company press release, the acquisition will boost the Android market and increase competition in mobile computing. However, the officials clarified that the development of the Android platform will remain unchanged and the OS will continue being open.

Google will operate Motorola with its 20000 employees as a separate business unit. The transaction is expected to close by end of the year or early next year.

Motorola Mobility comprises two groups since it was spun off from the parent company in January. The divisions include Mobile Devices that manufactures phones and Home that produces set-top boxes and other IPTV devices.