As expected, Motorola Inc yesterday said it has signed an agreement to purchase General Instrument Corp in an all-stock deal worth around $US11 billion.
The agreement calls for each General Instrument share to be exchanged for 0.575 shares of Motorola stock, Motorola officials said yesterday.
Should the deal go ahead, General Instrument chairman and chief executive officer Edward Breen will head up a new Motorola business unit focused on broadband access solutions, Motorola said. The unit will consist of what is currently General Instrument as well as Motorola's Internet and Networking Group's cable business.
Horsham, Pennsylvania-based General Instrument makes television set-top boxes. Acquiring General Instrument would give Motorola the technologies the company needs to move into the area of converged video, voice and data networking in the home, Motorola officials said . Among the company's other products, Motorola makes chips for set-top boxes, high-speed cable data and telephony systems.
The deal is due to be completed by the first quarter of next year and Motorola expects the acquisition to slightly dilute earnings per share through 2000, the vendor said.
Both companies' directors have already approved the deal, but it is still subject to the customary regulatory and stockholder approvals. General Instrument's largest shareholder, AT&T subsidiary Liberty Media Group, has agreed to vote in favour of the merger, exchanging all of its outstanding shares for those of Motorola, according to Motorola. Liberty Media owns about 20 per cent of General Instrument.