NEW YORK (AP) — Shares of Arris Group Inc. rose to a new 52-week high on Tuesday after word that Comcast Corp. would buy $150 million worth of its shares as part of the Arris' purchase of the set-top cable box business from Motorola.
THE SPARK: Late Monday, Arris said Comcast had agreed to buy 10.6 million shares for about $150 million. The deal cements an already-close relationship between Arris and one of its biggest customers, Comcast.
THE BIG PICTURE: The Arris-Motorola deal for $2.35 billion will catapult Arris from being a relatively minor provider of high-speed Internet equipment into a much larger player in the delivery of video. Comcast, which needs set-top boxes to deliver cable to its customers, has a keen interest in that area, too.
Arris is buying the Motorola unit from Google. It said the deal with Comcast also reduces the number of shares to be issued to Google, and increases the cash that Arris pays to Google by $150 million, although the total cost of the deal remains the same. The deal will mean that Comcast and Google each own about 7.85 percent of the outstanding Arris shares after the deals close.
SHARE ACTION: Up 68 cents, or 4.4 percent, to $16.02 in midday trading after rising as high as $16.05 earlier. That was the highest level since July 2007, according to FactSet. A year ago Arris shares traded as low as $10.74.
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