Google is selling its Motorola Mobility Home division, which includes cable set-top boxes and modems, to Arris Group for $2.35 billion.
Under the terms of the deal, which Google and
Arris announced late Wednesday, Google will receive $2.05 billion in
cash and $300 million in newly issued Arris shares. That will give Google (GOOG, Fortune 500) about a 16% ownership stake in Arris (ARRS), a communications technology company, when the deal closes sometime during the second quarter of 2013,Rumors that Google would unload the struggling
cable-box division have been swirling since March, before the company's
purchase of Motorola Mobility was even finalized.
Google first revealed its plan to buy Motorola Mobility in August 2011, but the $12.5 billion deal didn't clear regulatory procedures until May 2012.
The deal was largely made so that Google could get access to Motorola
Mobility's portfolio of patents and it was always thought that Motorola
Mobility's set-top box business was not a great fit for Google.
Since the Motorola deal closed, Google has been
quick to make moves aimed at turning the business around. In August,
Google announced it would cut 4,000 Motorola employees, or 20% of the total workforce. At that point, Motorola Mobility had been unprofitable in 14 of the past 16 quarters.
Google and Arris noted in their press release
that Motorola Home generated $3.4 billion in revenue for the four
quarters ended September 30. Arris' purchase of the unit is expected to
save $100-125 million in annual operating costs.
