Google Sells Motorola Set-Top Box Division

On Wednesday, Arris Group (NASDAQ: ARRS  ) announced that it has entered into an agreement to purchase the Motorola set-top cable box division, known as "Motorola Home," from Google (NASDAQ: GOOGL  ) for $2.35 billion.

Though the acquisition is described as "cash-free, debt-free," Arris will pay Google $2.05 billion in cash at closing, and deliver $300 million worth of newly-issued Arris shares, giving Google ownership of about 15.7% of the company in exchange for Motorola Home. Arris will finance the cash portion of the buyout with debt financing from Bank of America (NYSE: BAC  ) and Royal Bank of Canada (NYSE: RBC  ) .

Arris noted that acquiring Motorola Home will more than triple its annual revenue stream, to approximately $4.7 billion, and permit cost savings of between $100 million and $125 million post-merger. In addition to the set-top box business itself, the parties noted that "the transaction will increase Arris's patent portfolio and provide a license to a wide array of Motorola Mobility patents."

The transaction is expected to close in Q2 2013. Shares of Arris opened up 5.4% this morning, and are still up 5% as of this writing, at $15.27. Shares of Google opened up 0.4%, and are still up 0.3%, at $722.42.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2165098, ~/Articles/ArticleHandler.aspx, 8/29/2014 12:27:21 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement