Arris announced it will acquire the Motorola Home business from Google for $2.35 billion. Arris will get outright possession of approximately 1,000 patents, and also an open license to about 1,000 more held by Motorola Mobility (which remains with Google). Google has also agreed to largely indemnify Arris against any adverse financial judgments stemming from the patent war between Motorola and TiVo.

Google will receive $2.05 billion in cash and approximately $300 million in newly issued Arris shares.

Arris has been considered one of the most likely companies to end up with Motorola Home. Pace and Technicolor were also said to have been interested, according to reports.

Arris CEO Bob Stanzione emphasized that the acquisition would greatly broaden Arris' product portfolio, its customer base and it's geographic reach. He noted that presently, Arris' two biggest customers - Comcast and Time Warner Cable - represent 50 percent of sales; following the acquisition, it would take the combined entity's top five customers to represent half of sales.

Arris and Motorola have long been direct competitors and do have product overlap, including cable modem termination systems (CMTSs), set-tops, gateways and other equipment. On a conference call with analysts and press that was held at 6:30 p.m. ET, Stanzione said Arris had no plans to exit any current product line from either of the two companies. He added that integration teams would be formed in the morning (Dec. 20) but did not volunteer whether those teams might identify areas of redundancy.

Last May, Arris and NDS announced they were integrating the former's gateway with the latter's middleware and security. Asked if the Motorola acquisition threatens Arris' relationship with NDS, Arris executives said no. Arris group vice president of products and services Bruce McClelland said Arris would continue with its Moxi whole-home solution, the NDS product, which is being developed at the behest of one customer ("maybe more than one," he noted) and a system being developed using Comcast's Reference Design Kit (RDK). The latter two products have not been made commercially available yet.

Motorola has a three-year-old patent suit it filed against TiVo; TiVo last year counter-sued. The potential harm to Motorola should it lose the fight was said by people knowledgeable of the situation to be a sticking point that delayed Google's sale of the Motorola Home unit by more than a month. Stanzione withstood a barrage of similar questions from analysts, insisting that Arris' financial exposure to the suit was minimal, not material, and not relevant. One analyst brought up the possibility that a court might issue some sort of injunction, forcing Arris to suspend sales of Motorola products, but Stanzione said that possibility was remote.

“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,” said Bob Stanzione, chairman and CEO of Arris. “Ever-expanding consumer demand for bandwidth will continue to drive growth across cloud and network technologies we provide that enable innovative home entertainment products and services.”

Motorola Home is a profitable business that generated revenues of $3.4 billion for the trailing four quarters ended Sept. 30. Together, Arris and Motorola Home will have a global presence with more than 500 customers in 70 countries, more than tripling Arris' pro forma combined revenue to approximately $4.7 billion for the trailing four-quarter period ended Sept. 30, the company said. The combination is expected to generate approximately $100 million to $125 million in annual cost synergies.

The transaction is expected to close by the second quarter of 2013, subject to customary approvals and closing conditions.

Stanzione said that with the shares issued to pay Google, Google will hold a substantial position in Arris, and he expects Google will be a long-term investor.