Motorola Buys Netopia

Motorola (MOT Quote - Cramer on MOT - Stock Picks) gears up for the rise of telco TV with the acquisition of Netopia (NTPA Quote - Cramer on NTPA - Stock Picks).

The Schaumburg, Ill. wireless phone manufacturer says it will pay $7 a share, or about $183 million in cash, for Emeryville, Calif. based Netopia. For Netopia shareholders, the deal represents a 25% premium over the stock's Monday close of $5.59.

Netopia makes broadband equipment for DSL customers, which allows for phone, TV and fast Internet connections. Motorola will add Netopia's products to the cable gear business it acquired with General Instruments.

The deal will help Motorola provide phone companies like AT&T (T Quote - Cramer on T - Stock Picks) with the infrastructure and consumer home networking gear to enable IPTV, or Internet protocol television.

The deal is expected to close early next year. Motorola says the acquisition will have no impact on 2007 adjusted earnings.

This is the second large acquisition by Motorola in less than a week as the resurgent mobile phone maker seeks to broaden its product offerings. On Friday, Motorola agreed to acquire Good Technologies, a closely held wireless email developer.

Motorola shares rose 22 cents to $21.39 in premarket trading Tuesday.