Google Sells Motorola Home to Arris for $2.35B to Focus on Mobile Strategy
In a strategic move to streamline its operations, Google has announced the sale of Motorola Home—the broadband division of Motorola Mobility—to ARRIS Group, Inc., a leading broadband media technology company. The \(2.35 billion deal, comprising \)2.05 billion in cash and $300 million in ARRIS stock, marks Google’s shift toward prioritizing its mobile and intellectual property assets.
Key Details of the Deal
- Transaction Value: \(2.35 billion (\)2.05B cash + $300M ARRIS stock)
- Google’s Stake Post-Sale: ~15.7% ownership in ARRIS
- Expected Closing: Q2 2013, pending regulatory approvals
- Motorola Home Revenue (Trailing 4 Quarters): $3.4 billion
- Projected Synergies: \(100–\)125 million in annual cost savings
Why Google Sold Motorola Home
Google’s $12.4 billion acquisition of Motorola Mobility in 2012 was primarily driven by its mobile patents and hardware business. Motorola Home, which specializes in cable and broadband solutions, didn’t align with Google’s long-term vision—despite its experimental Google Fiber initiative. Reports earlier in 2012 hinted at Google’s plans to divest the unit, with ARRIS emerging as a likely buyer.
Executive Insights
- Marwan Fawaz, EVP of Motorola Mobility: > “We share a similar vision with ARRIS for the industry’s migration to IP. Combining our solutions will transform how service providers deliver connected home experiences globally.”
- Bob Stanzione, ARRIS CEO: > “This acquisition accelerates our ability to deliver next-gen IP broadband products and expands our footprint to 500+ customers across 70 countries.”
Strategic Benefits for ARRIS
- Expanded Product Portfolio: Enhances ARRIS’s offerings in video, data, and voice solutions.
- Global Reach: Combined entity projects $4.7 billion in pro forma revenue.
- Patent Boost: Gains access to Motorola’s broadband patents and a license to additional IP.
- Innovation Acceleration: Strengthens R&D capabilities for IP-connected home technologies.
Legal and Financial Backing
- Advisors: Evercore Partners and Bank of America Merrill Lynch (ARRIS); Barclays (Google).
- Debt Financing: Bank of America Merrill Lynch and RBC funded the cash portion.
- Liability Cap: Google agreed to limit ARRIS’s exposure in TiVo’s ongoing patent lawsuit against Motorola.
The Bigger Picture
This sale underscores Google’s strategy to double down on mobile and core services, while ARRIS solidifies its position as a broadband technology leader. The deal also reflects broader industry trends toward IP-based home entertainment and multi-screen solutions.
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