Google (NASDAQ:GOOG) announced on Wednesday that it will sell the TV set-top box business it acquired when it purchased Motorola Mobility last year. It’s going to Arris Group (NASDAQ:ARRS) in a deal worth $2.35 billion.
Investors liked the news, sending Arris shares up about 5% in Thursday morning trading, while Google rose fractionally.
Under the deal, expected to close in June, Arris will pay Google $2.05 billion in cash and $300 million worth of its shares to acquire the unit. Over the last year, Motorola’s set-top box business generated revenue of $3.4 billion, compared to just $1.3 billion for the entire Arris Group, the Associated Press noted.
The deal pares away a part of Motorola’s business that Google had shown little interest in. The search giant is trying to leverage Motorola’s portfolio of 17,000 mobile patents and its tablet and smartphone manufacturing business to boost its presence in the mobile marketplace.
TiVo (NASDAQ:TIVO), the maker of digital video-recording devices for TVs, has sued Motorola for patent infringement over its set-top boxes in federal court. That lawsuit will go to trial next year. Arris says that under its purchase deal, Google will still be responsible for the majority of any judgment against the Motorola unit. In September, TiVo settled a similar lawsuit with Verizon (NYSE:VZ) for $250 million.