Motorola Mobility’s TV set-top business is up for grabs. Google is selling the business for $2.35 billion to Arris Group, a small internet equipment provider that hopes to make it big in video delivery.

Investors seem thrilled and Arris’ stock shot up by 17 percent after the deal was announced. Google will also benefit from the deal, as it will shave off some of Motorola Mobility’s value. Google acquired Motorola Mobility for its portfolio of more than 17,000 patents, but Google was never too keen on set-top boxes.

There is a slight problem though. TiVo is seeking billions in damages from Moto, alleging that its set-top boxes infringed on its patents. To sweeten the deal, Google agreed to cover most of the bill for any damages TiVo might win in the case.

Google will receive $2.05 billion in cash and $300 million worth of Arris stock. The deal should be finalized by the end of June.

More here.