Google yesterday announced it had sold Motorola Home – which came as part of its $12.5bn (£7.7bn) purchase of Motorola this year – in a $2.35bn deal that will see the unit go to US firm Arris.
Pace was unwilling to match Arris’s value for the company and the merger now poses the threat of a much bigger competitor in the US, where Pace generates most of its revenues.
The heavily-leveraged deal will see Google take a 15.7 per cent stake in Arris. Pace boss Mike Pulli said: “Although we had the support of our major shareholders and committed facilities, we could not reach an appropriate conclusion to the potential transaction.”
Shares in the company had been suspended last week on news of the potential deal, due to the fact that it would have constituted a reverse takeover – since Motorola Home’s value is much more than Pace’s. The company relisted yesterday, with shares falling three per cent on the news before recovering.