December 19, 2012 / 11:33 PM / 6 years ago

Google sells Motorola TV set-top business for $2.35 billion

SAN FRANCISCO (Reuters) - Google Inc sold set-top TV box maker Motorola Home to Arris Group Inc for $2.35 billion in cash and stock, the companies announced on Wednesday.

The Google logo is seen as Google Executive Chairman Eric Schmidt speaks at a promotional event for the Nexus 7 tablet in Seoul September 27, 2012. REUTERS/Kim Hong-Ji

The transaction, which was approved by the boards of directors of both companies, is expected to close by the second quarter of 2013, subject to regulatory approvals.

Google will have a roughly 15.7 percent ownership interest in Arris, a Suwanee, Georgia-based cable equipment maker, after the deal.

Arris expects the acquisition to be significantly accretive to its non-GAAP earnings in the first full year after closing, the company said.

Google acquired the set-top box maker as part of its $12.5 billion acquisition in May of Motorola Mobility, which was motivated by a desire to snap up its large portfolio of communications patents.

Since acquiring Motorola, Google has moved to revamp the company’s loss-making mobile phone business, while appearing less interested in the set-top business.

Google said the Motorola Home business is profitable and generated revenues of $3.4 billion for the trailing four quarters ended September 30.

Shares of Google were down $1.6 to $718.50 in after-hours trading on Wednesday. Arris shares were halted.

Reporting By Alexei Oreskovic; Editing by Gary Hill and Leslie Gevirtz

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