Telecommunications giant Motorola said it
will buy General Instrument in an $11 billion stock swap. Under the deal,
each General Instrument share would be exchanged for 0.575 shares of
Motorola. Following the merger, Motorola shareholders will hold
approximately 17 percent of Motorola stock.
The company said the merger would position it as a leader in providing
converged Internet, telecommunications and entertainment services. The
companies expect to close the deal during the first quarter of next year,
subject to regulatory and shareholder approval. AT&T subsidiary
Liberty Media Group, the largest General Instrument shareholder, has
agreed to vote for the merger.
Motorola is preparing for the convergence of broadband communications,
cable, and entertainment, Executives said. General Instrument, which makes
television set-top boxes, fits in with that strategy.
"This partnership will enable us to expand our portfolio for
network access, delivering next-generation solutions along with 'home
hubs' that will handle high-speed Internet access and video entertainment,
as well as carrier-quality voice services," Motorola Chief Executive
Christopher B. Galvin said.