Google’s Motorola Mobility agreed on December 19, 2012, to sell its Motorola Home business to ARRIS for approximately $2.35 billion in cash and stock. The deal covered far more than set-top boxes: it included video-delivery and broadband equipment, related intellectual property rights, and customer relationships. It closed on April 17, 2013. Google did not sell Motorola’s mobile-phone business in this transaction.
What Google sold: more than set-top boxes
Motorola Home was Motorola Mobility’s provider-facing home-equipment business. Cable, broadband, and telecommunications companies used its products to deliver television, data, and voice services to households. Calling it a “set-top box division” is convenient shorthand, but it understates the scope of the assets ARRIS acquired.
- QAM and IP set-top boxes, along with video-processing and video-delivery systems.
- IP gateways and other customer-premises equipment for broadband providers, including data and voice equipment.
- Engineering capabilities, customer relationships, and intellectual property rights connected to the Home business.
ARRIS’s 2013 Form 10-K described the acquisition as broadening its video-processing, delivery, set-top-box, and IP-gateway offerings. It was a sale of a technology business serving network operators, not simply a consumer retail product line.
Why Google separated Motorola Home
Google completed its acquisition of Motorola Mobility on May 22, 2012. Google later reported paying approximately $12.4 billion in cash for the company in its 2012 Form 10-K. Motorola Mobility encompassed both mobile-device operations and the Home equipment business.
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Selling Home less than seven months later was a separation of businesses within that larger acquisition. The Home operation was substantial and profitable, but its provider infrastructure products and customer base fit more directly with ARRIS’s broadband-equipment business than with Google’s software, advertising, mobile-platform, and consumer-device focus. That fit is an interpretation of the companies’ businesses, not a quoted admission by Google.
The transaction did not include Motorola’s handset business. Google retained Motorola Mobility’s mobile-device operations until it agreed to sell that business to Lenovo in 2014, a separate transaction.
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What the $2.35 billion figure means
The December 2012 figure was the announced transaction value, not an all-cash payment and not the final amount Google later reported for accounting purposes.
| Measure | Amount or detail | What it represents |
|---|---|---|
| Announced consideration | Approximately $2.35 billion | Cash-and-stock transaction value announced by Google and ARRIS, on a cash-free, debt-free basis and subject to adjustments. |
| Announced cash component | Approximately $2.05 billion | Cash expected to go to Google under the announced terms. |
| Announced stock component | Approximately $300 million | New ARRIS shares expected to go to Google. |
| Expected Google ownership | Approximately 15.7% | The expected post-closing ARRIS stake stated in the original announcement; it was not the later-reported final stake. |
| Delivered at closing | Approximately $2.24 billion in cash and 10.6 million ARRIS shares | ARRIS’s completion filing described what the seller received when the transaction closed. |
| Google’s later-reported total consideration | Approximately $2.412 billion | Google’s accounting disclosure included approximately $2.238 billion received at closing, $174 million in post-closing adjustments, and ARRIS stock valued at approximately $175 million. |
The announced terms are in the joint announcement filed with the SEC. ARRIS’s completion filing records the cash and shares delivered at closing. Google’s 2013 Form 10-K and 2014 Form 10-K give the later accounting picture. These disclosures describe different stages and presentations of the transaction; the figures should not be added together as though they were separate payments.
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Deal timeline
- May 22, 2012: Google completed its acquisition of Motorola Mobility, as recorded in its Form 8-K.
- December 19, 2012: Google and ARRIS announced the agreement to sell Motorola Home.
- January 2013: ARRIS disclosed further transaction and financing details, including Comcast’s planned investment role.
- April 17, 2013: ARRIS completed the acquisition.
- Third quarter of 2013: Google later reported receiving post-closing cash adjustments.
Why ARRIS wanted the business
ARRIS had strengths in voice and data equipment; Motorola Home added scale in video and a broader path to end-to-end broadband-video solutions. ARRIS said the acquisition would expand its international reach and customer base, reinforce research and development, and help it develop products for a shift toward IP-based and multiscreen home entertainment.
The intellectual-property contribution was not a wholesale transfer of Google’s Motorola patents. ARRIS said the deal would approximately double its patent portfolio to nearly 2,000 patents and applications, and provide a license to approximately 20,000 Motorola Mobility patents relevant to the Home business. The distinction matters: ARRIS gained rights relevant to its acquired operation, not ownership of Motorola Mobility’s entire patent portfolio.
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The companies also presented the scale case in the transaction announcement. Motorola Home generated approximately $3.4 billion in revenue for the trailing four quarters ended September 30, 2012. ARRIS and Motorola Home said the combined business had approximately $4.7 billion in pro forma revenue for that same period, more than 500 customers, and reach in 70 countries. ARRIS projected annual cost synergies of approximately $100 million to $125 million. These were company-provided historical figures and forward-looking estimates, not independently verified results or proof that the projected savings were realized.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Comcast’s role—and Google’s continuing ARRIS stake
Comcast was involved in financing and investment arrangements connected with the transaction, and it was a major cable operator with a strategic interest in broadband equipment. It was not the buyer: ARRIS acquired Motorola Home. ARRIS filings describe Comcast’s role in the transaction structure and the expected ownership positions of investors in the combined company.
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Google’s final position also differed from the initial ownership estimate. Although the December 2012 announcement anticipated that Google might own approximately 15.7% of ARRIS after closing, Google later reported an ARRIS stake of approximately 7.8% in its 2014 Form 10-K. The later figure reflects the final capitalization and shares issued in connection with the transaction.
Google’s filings also reported a net gain of approximately $757 million in discontinued operations related to the Home divestiture. That accounting gain is not, by itself, a measure of Google’s economic profit on buying Motorola Mobility: the original acquisition covered a wider company, and the gain reflects accounting allocations and transaction effects.
Why the transaction mattered
For Google, the sale showed that acquiring Motorola Mobility did not mean keeping every business inside it. For ARRIS, Motorola Home added video infrastructure, provider relationships, engineering capabilities, and licensed intellectual property to its existing broadband equipment operation. The deal also captured a broader industry transition: equipment suppliers were positioning for homes served by a mix of traditional cable video, IP delivery, and viewing across multiple screens.
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