Google is selling off Motorola Mobility's set-top box division, Motorola Home, to Arris Group for $2.35 billion (£1.4 billion), the companies have announced.
The deal, which has been approved by both companies' boards, is expected to close by the second quarter of 2013. Under the agreement, Google will receive $2.05 billion (£1.26 billion) in cash when the transaction closes, as well as approximately $300 million (£185 million) in Arris shares, giving Google a 15.7 per cent stake in the company.
Google acquired the division as part of its $12.5 billion (£7.7 billion) purchase of Motorola Mobility. The web giant reportedly received multiple offers for the unit, which makes set-top boxes used to deliver cable video. Google was reportedly looking to offload the unit to focus its attention on mobile devices.
With more than 500 customers in 70 countries, Motorola Home is a profitable business that generated revenues of $3.4 billion (£2 billion) for the period ending on 30 September 2012.
"The industry faces its biggest technology transformation, and together Arris and Motorola will be able to accelerate related innovations such as the introduction of the IP Connected Home environments that service providers need and that their consumers crave," Motorola Mobility CEO Dennis Woodside said in a statement.
Arris, a cable equipment maker, said the deal will bolster its patent portfolio and allow the company to license Google-owned Motorola Mobility patents. Arris CEO Bob Stanzione said the deal will give the company a more comprehensive product offering.
"Acquiring Motorola Home builds on Arris's rich history, creating a global player with significant footprint, revenue, and cash flow," Stanzione said. "It also adds expertise in video and a larger presence in the home to our core strengths in voice and data, ensuring we are even better positioned to capitalize on and manage the evolution toward multi-screen home entertainment."