Google Sells Motorola Set-Top Box Division
On Wednesday, Arris Group announced that it has entered into an agreement to purchase the Motorola set-top cable box division, known as "Motorola Home," from Google 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 and Royal Bank of Canada .
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.
The article Google Sells Motorola Set-Top Box Division originally appeared on Fool.com.Fool contributor Rich Smith has no positions in the stocks mentioned above. The Motley Fool owns shares of Bank of America and Google. Motley Fool newsletter services recommend Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.