Google Sells Motorola Tv Set-Top Business For $2.35 Billion

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[size=5][color=#000000][font=arial, helvetica, sans](Reuters) - Google Inc agreed to sell set-top TV box maker Motorola Home to Arris Group Inc for $2.35 billion in cash and stock, the companies said on Wednesday.[/font][/color][/size][/size][color=#000000][font=arial, helvetica, sans][size=4]
[size=5]The transaction is expected to close by the second quarter of 2013, subject to regulatory approvals.[/size][/size][/font][/color][color=#000000][font=arial, helvetica, sans][size=4]
[size=5]Google will have a roughly 15.7 percent ownership interest in Arris, a Suwanee, Georgia-based cable equipment maker, after the deal.[/size][/size][/font][/color][color=#000000][font=arial, helvetica, sans][size=4]
[size=5]Shares of Arris jumped nearly 17 percent to $16.99 in afterhours trading on Wednesday following the news. Google's stock was down $1.61 at $718.50.[/size][/size][/font][/color][color=#000000][font=arial, helvetica, sans][size=4]
[size=5]The companies said the deal would increase Arris' patent portfolio and provide a license to a "wide variety" of Motorola Mobility patents but did not provide details.[/size][/size][/font][/color][color=#000000][font=arial, helvetica, sans][size=4]
[size=5]Google had been expected to sell the set-top business, following a disclosure last week by British TV decoder maker Pace Plc that it had made an offer to Google. Arris had also been cited among the bidders in media reports.[/size][/size][/font][/color][color=#000000][font=arial, helvetica, sans][size=4]
[size=5]Google acquired the set-top box maker in May as part of its $12.5 billion purchase of Motorola Mobility, a deal motivated by a desire to snap up Motorola's large portfolio of communications patents.[/size][/size][/font][/color][color=#000000][font=arial, helvetica, sans][size=4]
[size=5]Since acquiring Motorola, Google has moved to revamp the company's money-losing mobile phone business, while appearing less interested in the set-top business.[/size][/size][/font][/color][color=#000000][font=arial, helvetica, sans][size=4]
[size=5]The sale of the Motorola Home business, which includes manufacturing facilities, should relieve some of the concerns that investors had about Google's acquisition of Motorola, said Needham & Co analyst Kerry Rice.[/size][/size][/font][/color][color=#000000][font=arial, helvetica, sans][size=4]
[size=5]"Google has effectively offloaded most of the manufacturing that now is associated with Motorola," and that investors feared would pressure Google's profit margins, said Rice.[/size][/size][/font][/color][color=#000000][font=arial, helvetica, sans][size=4]
[size=5]"They're keeping the things that are most important to them, the design and patents of the mobile phone side," said Rice.[/size][/size][/font][/color][color=#000000][font=arial, helvetica, sans][size=4]
[size=5]Google said the Motorola Home business is profitable and generated revenues of $3.4 billion for the trailing four quarters ended September 30.[/size][/size][/font][/color][color=#000000][font=arial, helvetica, sans][size=4]
[size=5](Reporting By Alexei Oreskovic; Editing by Gary Hill, Leslie Gevirtz and Steve Orlofsky)[/size][/size][/font][/color]
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[size=5]Source: [/size]http://www.reuters.com/article/2012/12/20/us-google-motorola-idUSBRE8BI1NE20121220[/size][/font][/color]