Arris Group (Nasdaq: ARRS) said late Wednesday it agreed to buy Motorola Mobility's home division from Google (Nasdaq: GOOG) for $2.35 billion in cash and stock in a deal that would make it one of the world's biggest set-top vendors.
Arris has acquired several cable technology suppliers in the last decade, including Paul Allen's Digeo, C-COR and BigBand Networks. But the Motorola deal would be its biggest deal yet, and would allow it to challenge Cisco (Nasdaq: CSCO), Pace (LSE: PIC.L), Humax and other set-top and customer premise equipment vendors.
"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," Arris CEO Bob Stanzione said in a prepared statement.
The deal comes nearly seven months after Google closed its $12.5 billion acquisition of Motorola Mobility. Arris said it will pay Google $2.05 billion in cash and $300 million in newly issued Arris stock. Google would own a 15.7 percent stake in Arris after the deal closes, which the companies said should occur by the second quarter of 2013.
Suwanee, Ga.-based Arris said it expects to generate $100 million to $125 million in annual "cost synergies" through the Motorola Mobility acquisition, but it didn't detail how many employees may be cut or which facilities may be closed after the deal is finalized.
Motorola Mobility's home division and Arris count more than 500 customers in 70 countries combined and would have pro forma combined revenue of $4.7 billion for the quarter ending Sept. 30, according to Arris.
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