Google offloads Motorola Home to Arris for US$2.35B

Google will offload Motorola's set top box division, Motorola Home, to Arris Group for US$2.35 billion, the companies announced today.

The deal will see Google pick up US$2.05 billion in cash and $300 million in Arris shares, giving Google a 15.7 percent stake in the company.

Motorola Home has 5,000 employees in 18 locations, and over 500 customers in 70 countries. Arris, which has traditionally been focused on network infrastructure and telecommunications equipment, will now pick up Motorola Home's network infrastructure division and set top box devices.

Arris said that the deal will see a boost to the company's patent portfolio and will give access to Arris to licence Motorola Mobility patents that are now owned by Google. Arris CEO Bob Stanzione said that the deal will see Arris gain significant expertise in video delivery.

"Acquiring Motorola Home builds on ARRIS' rich history, creating a global player with significant footprint, revenue, and cash flow. It also adds expertise in video, and a larger presence in the home to our core strengths in voice and data, ensuring we are even better positioned to capitalise on and manage the evolution toward multi-screen home entertainment," he said in a statement.

"We look forward to working with the Motorola Home team as we integrate their complementary product portfolio and engineering expertise to accelerate best-in-class end-to-end solutions, to a broader customer base and increase value for shareholders."

The transaction is set to close by the second quarter of 2013, subject to regulatory approval.

Getting close to the estimated US$2.5 billion worth of Motorola Home will take some pressure off Google. The internet giant secured the deal to buy Motorola Mobility in August last year for US$12.5 billion, but after restructuring the company, this cost has been revised to around US$13 billion. Google acquired 17,000 patents from Motorola Mobility as a result of the purchase.