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: GOOG  ) 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.