Motorola to split into two Public Companies
Motorola Inc. will split in two in the first quarter of 2011, combining the mobile-phone and set- top box divisions into one publicly traded company and the enterprise mobility and networks units into a second business.
Sanjay Jha, now head of the handset business, will be the chief executive officer of the mobile phone and set-top box company, Schaumburg, Illinois-based Motorola said today in a statement. Greg Brown, co-CEO of Motorola, will head up the other business.
Motorola had delayed a planned spinoff of the handset business in October 2008, amid the global recession. The company, which has lost market share to rival handset makers such as iPhone maker Apple Inc., is betting that a combination of the two consumer-focused businesses will win back customers.
The separation will occur through a tax-free stock dividend of shares in the new companies to existing shareholders. Both companies will be “well capitalized” to follow their strategies, Motorola said.
The mobile devices and home business will own the Motorola brand, and license it free of royalties to the enterprise mobility and networks businesses.
Motorola climbed as much as 4.5 percent $6.95 in late trading after rising 2 cents to $6.65 at 4 p.m. on the New York Stock Exchange. The shares have dropped 14 percent this year, after surging 75 percent in 2009.