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Pastimes : John Dessauer's Investors World -- Ignore unavailable to you. Want to Upgrade?

To: DWB who wrote (2163)	9/15/1999 7:52:00 AM
From: polarisnh	Read Replies (1) \| Respond to of 2346

Motorola Buys Cable Box Maker By NOELLE KNOX AP Business Writer NEW YORK (AP) - Motorola Inc. (NYSE:MOT - news) made a bold bet today on the future of cable television, announcing it had agreed to pay about $11 billion in stock for General Instrument Corp. (NYSE:GIC - news), the largest producer of cable TV set-top boxes. General Instrument's set-top box operations dominate one of the key technologies that is revolutionizing home entertainment. With the new equipment available today, the televisions of tomorrow can offer many more ``broadband' cable services, including Internet access, interactive video games and telephone services. Motorola, best known for making cellular phones and pagers, is looking for a stronger presence in the fast-growing market for broadband services. General Instrument is the market leader in set-top boxes, controlling 72 percent of the North American market, according to Allied Business Intelligence Inc., a technology research company. The number of set-top boxes in North American homes is expected to skyrocket from about 20 million today to 113 million over the next five years, according to Allied Business Intelligence. For General Instrument, a deal with Motorola will mean more marketing power, better supply contracts and a broader product line. Under the deal announced today, Motorola will offer 0.575 shares of its stock for each of General Instrument's shares. That would represent a value of about $11 billion at Tuesday's closing prices. Motorola's shares closed Tuesday up $2.811/4 at $93.183/4 on the New York Stock Exchange, where General Instrument's stock rose 811/4 cents to $50.50. The boards of both companies have approved the deal which is subject to approval by shareholders and regulators. It is expected to be completed in the first quarter of 2000. Motorola is based in Schaumburg, Ill., while General Instrument is based in Horsham, Pa. Today's announcement could put pressure on other cable equipment companies to find partners. Scientific-Atlanta Inc. (NYSE:SFA - news), the No. 2 maker of set-top boxes, has seen its stock climb this week as investors bet the company will be the next target. The consolidation among these companies reflects the merger frenzy among the nation's cable TV operators. AT&T Corp. (NYSE:T - news), Cox Communications Inc. (NYSE:COX - news), and Charter Communications Holdings LLC are among the cable firms that have announced major acquisitions in the past six months.