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Arris Group, a global broadband media technology company, and Motorola Mobility, a Google subsidiary, have entered into a definitive agreement under which Arris will acquire the Motorola Home business from Motorola Mobility, for $2.35 billion in a cash-and-stock transaction approved by the boards of drectors of both companies. 

Acquiring Motorola Home will enhance Arris' ability to provide next-generation consumer video products and services, supporting a more comprehensive product offering while also accelerating its ability to deliver a comprehensive set of industry-leading new products for broadband to a wide spectrum of customers. The transaction will increase Arris' patent portfolio and provide a license to a wide array of Motorola Mobility patents.

"This transformational combination of two complementary businesses will create a leading end-to-end provider of today's video, data, and voice products and tomorrow's next-generation IP-based broadband products. Ever-expanding consumer demand for bandwidth will continue to drive growth across cloud and network technologies we provide that enable innovative home entertainment products and services. Acquiring Motorola Home 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 capitalize on and manage the evolution toward multi-screen home entertainment,” said Bob Stanzione, chairman and CEO of Arris.

Together, Arris and Motorola Home will have a global presence with over 500 customers in 70 countries, more than tripling Arris pro forma combined revenue to approximately $4.7 billion for the trailing four quarter period ended September 30, 2012. The combined entity will offer a wide array of products and solutions and will have an expanded customer base encompassing the full spectrum of broadband content and service providers.

"Our Home business has been a vibrant part of Motorola Mobility's portfolio, innovating while delivering strong financial performance. The industry faces its biggest technology transformation, and together Arris and Motorola will be able to accelerate related innovations such as the introduction of the IP connected home environments that service providers need and that their consumers crave," said Dennis Woodside, chief executive officer of Motorola Mobility.

Under the terms of the agreement, upon closing of the transaction, Google will receive $2.05 billion in cash and approximately $300 million in newly issued Arris shares, subject to certain adjustments provided for in the agreement, representing an approximately 15.7% ownership interest in Arris post-closing. The acquisition will be on a cash-free, debt-free basis and is expected to be significantly accretive to Arris' Non-GAAP earnings starting in the first full year after closing.

Tags: Motorola, Google, Arris

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