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ARRIS To Acquire Motorola Home Business For $2.35 Billion In Cash And Stock

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Wed Dec 19, 2012 6:12pm EST

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Transformative Combination Creates Global Player In Innovative End-To-End
Broadband Video Solutions
SUWANEE, Ga.  and  MOUNTAIN VIEW, Calif.,  Dec. 19, 2012  /PRNewswire/ -- ARRIS
Group, Inc. (NASDAQ: ARRS), a global innovator in broadband media technology,
and Google Inc. (NASDAQ: GOOG) today jointly announced that ARRIS and Motorola
Mobility, a Google subsidiary, have entered into a definitive agreement under
which ARRIS will acquire the Motorola Home business from Motorola Mobility, for 
$2.35 billion  in a cash-and-stock transaction approved by the Boards of
Directors of both companies.  The acquisition will be on a cash-free, debt-free
basis and is expected to be significantly accretive to ARRIS' Non-GAAP earnings
starting in the first full year after closing.

Under the terms of the agreement, upon closing of the transaction, Google will
receive  $2.05 billion  in cash and approximately  $300 million  in newly issued
ARRIS shares, subject to certain adjustments provided for in the agreement,
representing an approximately 15.7% ownership interest in ARRIS post-closing.

Acquiring Motorola Home will enhance ARRIS' ability to provide next-generation
consumer video products and services, supporting a more comprehensive product
offering while also accelerating its ability to deliver a comprehensive set of
industry-leading new products for broadband to a wide spectrum of customers. 
The transaction will increase ARRIS' patent portfolio and provide a license to a
wide array of Motorola Mobility patents.   

"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."

"Acquiring Motorola Home builds on ARRIS' rich history, creating a global player
with significant footprint, revenue and cash flow.  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.  We look forward to working with the
Motorola Home team as we integrate their complementary product portfolio and
engineering expertise to accelerate best-in-class end-to-end solutions to a
broader customer base and increase value for shareholders," Stanzione continued.

Together, ARRIS and Motorola Home will have a global presence with over 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 
September 30, 2012.  The combined entity will offer a wide array of products and
solutions and will have an expanded customer base encompassing the full spectrum
of broadband content and service providers.  

"Our Home business has been a vibrant part of Motorola Mobility's portfolio,
innovating while delivering strong financial performance," said  Dennis
Woodside, Chief Executive Officer of Motorola Mobility, the Google subsidiary
that is the parent of Motorola Home.  "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."

"We share a similar vision and strategy with ARRIS for the industry's migration
to IP.  The combination of our solutions, expert technologists and roadmaps
promises to transform how service providers deliver the smart, simple connected
home to consumers throughout the world," said  Marwan Fawaz, the Executive Vice
President of Motorola Mobility who leads Motorola Home.

Motorola Home is a profitable business that generated revenues of  $3.4 billion 
for the trailing four quarters ended  September 30, 2012.  The combination is
expected to generate approximately  $100 - $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.

The cash portion of the consideration to be received by Google at closing will
be funded through debt financing commitments from Bank of America Merrill Lynch
and Royal Bank of Canada.   

Evercore Partners is acting as lead financial advisor and  Troutman Sanders  is
acting as lead legal counsel to ARRIS on this transaction.  Bank of America
Merrill Lynch is also advising ARRIS.  Barclays is acting as financial advisor
and  Cleary Gottlieb Steen  & Hamilton LLP is acting as legal counsel to Google
on this transaction.

Conference Call and Webcast Details

ARRIS will host a conference call at  6:30 pm EST  today to discuss this
announcement.  You may participate in this conference call by dialing (800)
299-7098 or (617) 801-9715 for international calls prior to the start of the
call and providing the ARRIS Group, Inc. name, conference pass code 92735185,
and  Bob Puccini  as the moderator.  A replay of the conference call can be
accessed approximately two hours after the call through  December 26, 2012  by
dialing (888) 286-8010 or (617) 801-6888 and using the pass code 25900440.  Live
internet access to the call will be available through the Investor Relations
section of the Company's website at  www.arrisi.com.  A replay will also be made
available for a period of 12 months following the conference call on ARRIS'
website at  www.arrisi.com.

About ARRIS

ARRIS is a global communications technology company specializing in the design,
engineering and supply of technology supporting triple- and quad-play broadband
services for residential and business customers around the world. The company
supplies broadband operators with the tools and platforms they need to deliver
converged IP video solutions, carrier-grade telephony, demand driven video,
next-generation advertising, network and workforce management solutions, access
and transport architectures and ultra high-speed data services. Headquartered in
 Suwanee, GA, USA, ARRIS has R&D centers in  Suwanee, GA;  Beaverton, OR; 
Lisle, IL;  Kirkland, WA;  State College, PA;  Tel Aviv, Israel;  Wallingford,
CT;  Waltham, MA;  Cork, Ireland; and  Shenzhen, China, and operates support and
sales offices throughout the world. Information about ARRIS products and
services can be found at  www.arrisi.com

About Motorola Mobility

Motorola Mobility, owned by Google, fuses innovative technology with human
insights to create experiences that simplify, connect and enrich people's lives.
Our portfolio includes converged mobile devices such as smartphones and tablets;
wireless accessories; end-to-end video and data delivery; and management
solutions, including set-tops and data-access devices. For more information,
visit motorola.com/mobility.

About Motorola Home

Motorola Mobility's Home business delivers the smart, simple connected home,
which is driving the evolution of TV. The company is a global IP business that
is pioneering advancements in the cloud, the network, and the home to enable the
desired IP Connected Home and future service provider revenue streams. Its
end-to-end platform includes advanced software and network technology, services
and systems integration, content security, managed home solutions, and next-gen
home devices that deliver rich user experiences. For more information, visit: 
www.motorola.com/Video-Solutions/US-EN/Home.  

About Google, Inc.

Google is a global technology leader focused on improving the ways people
connect with information. Google's innovations in web search and advertising
have made its website a top Internet property and its brand one of the most
recognized in the world.

Forward-Looking Statements

This press release contains forward looking statements.  These statements
include, among others, statements concerning future performance of ARRIS
following the completion of the Motorola Home Business acquisition; ARRIS'
ability to achieve the strategic benefits and synergies outlined; and whether,
and the time frame during, which the acquisition will close.  Statements
regarding future events are based on the parties' current expectations.  Actual
results may differ materially from those suggested by any forward-looking
statement.  Forward-looking statements are necessarily subject to associated
risks related to, among other things, successful outcome of the acquisition
process, regulatory approval of the acquisition, the potential impact on the
business of Motorola Home Business due to uncertainty about the acquisition, the
retention of employees of Motorola Home Business and the ability of ARRIS to
successfully integrate Motorola Home's opportunities, technology, personnel and
operations.  Other factors that could cause results to differ from current
expectations include: the uncertain current economic climate and financial
markets, and their impact on our customers' plans and access to capital: the
impact of rapidly changing technologies; the impact of competition on product
development and pricing; the ability of ARRIS to react to changes in general
industry and market conditions; rights to intellectual property and the current
trend toward increasing patent litigation, market trends and the adoption of
industry standards; possible acquisitions and dispositions; and consolidations
within the telecommunications industry of both the customer and supplier base. 
These factors are not intended to be an all-encompassing list of risks and
uncertainties that may affect the Company's business. Additional information
regarding these and other factors can be found in ARRIS' reports filed with the
Securities and Exchange Commission, including its Form 10-Q for the quarter
ended  September 30, 2012.  In providing forward-looking statements, the Company
expressly disclaims any obligation to update publicly or otherwise these
statements, whether as a result of new information, future events or otherwise.

ARRIS Contacts

For Investors
Bob Puccini, ARRIS Investor Relations
(720) 895-7787  
bob.puccini@arrisi.com

For Media
Alex Swan, ARRIS Media Relations  
(678) 473-8327
alex.swan@arrisi.com

Matt Benson/Jenny Gore, Sard Verbinnen & Co  
(212) 687-8080/(415) 618-8750
mbenson@sardverb.com /  jgore@sardverb.com 

Google Contacts

For Investors
Willa Chalmers
(650) 214-3381
willa@google.com

For Media
press@google.com

Motorola Contacts

For Media
Jennifer Erickson
(847) 523-2422
jennifer.erickson@motorola.com

Jeanne Russo
(215) 323-1880
jeanne.russo@motorola.com

SOURCE  ARRIS Group, Inc.
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