Google sells Motorola TV set-top business for $2.35 billion

The Google logo is seen as Google Executive Chairman Eric Schmidt speaks at a promotional event for the Nexus 7 tablet in Seoul September 27, 2012.

SAN FRANCISCO (Reuters) - Google Inc sold set-top TV box maker Motorola Home to Arris Group Inc for $2.35 billion in cash and stock, the companies announced on Wednesday.

The transaction, which was approved by the boards of directors of both companies, is expected to close by the second quarter of 2013, subject to regulatory approvals.

Google will have a roughly 15.7 percent ownership interest in Arris, a Suwanee, Georgia-based cable equipment maker, after the deal.

Arris expects the acquisition to be significantly accretive to its non-GAAP earnings in the first full year after closing, the company said.

Google acquired the set-top box maker as part of its $12.5 billion acquisition in May of Motorola Mobility, which was motivated by a desire to snap up its large portfolio of communications patents.

Since acquiring Motorola, Google has moved to revamp the company's loss-making mobile phone business, while appearing less interested in the set-top business.

Google said the Motorola Home business is profitable and generated revenues of $3.4 billion for the trailing four quarters ended September 30.

Shares of Google were down $1.6 to $718.50 in after-hours trading on Wednesday. Arris shares were halted.

(Reporting By Alexei Oreskovic; Editing by Gary Hill and Leslie Gevirtz)