Motorola Inc refused to confirm yesterday that it was in talks to buy General Instrument Corp the largest supplier of television set-top boxes for $10bn, although the deal was widely reported on the web to be the case. As ComputerWire went to press Wall Street was expecting other bids to come in for GI.
Set-top boxes are needed for any sort of high-speed, premium digital service from cable operators and the interactive voice, data and video services field is an area in which many companies are vying for a leading position as consumers demand ever-faster internet access. Such a deal would unite one of the world’s best- known consumer-electronics makers with the cable industry’s leading provider of TV set-top boxes in a market that is expected to fundamentally change the way consumers use their TVs, telephones and PCs in the home.
We don’t comment on rumors or speculation, said Motorola spokesperson Alan Buddendeck as the technology giant began a two- day company briefing today in Austin, the headquarters for its semiconductor products sector. According to the Wall Street Journal, General Instrument shareholders would get a little more than half of a Motorola share for each of their common shares in General Instrument.
Analysts said the deal would give Motorola a boost following several years of poor results and the black cloud of Iridium, the high-profile satellite-phone project that recently filed for bankruptcy protection and could cost the company $2.2bn if it goes under. One analyst noted that Motorola has disparate products in the cable equipment sector, so merging with GI would give it a solid platform to leverage existing products and new technologies.
For General Instrument, it will mean being part of a much larger organization with a household name that has pioneered technology including the car radio, cellular phones and pagers. Motorola is also a provider of semiconductors, an integral component of set- top boxes, which would no doubt come in handy as General Instrument continues to look for ways to cram more and more functions into its set-top boxes. A marriage between Motorola and General Instrument could also be good news for consumers. Motorola could use its expansive network of retail outlets to help make cable set-top boxes as readily available to consumers as are its cellular phones.
