Chicago (IL) - Motorola announced today that it will spin off into two separate publicly traded companies - one for its mobile phone division and one for its other operations, like broadband and TV.
It did not announce what new name or names will be used when Motorola splits into two companies. The firm currently refers to the two operations as the "Mobile Devices" unit and its "Boradband & Mobility Solutions" unit. Most of Motorola’s work outside the mobile phone sector deals with corporate and government products/services.
"Our decision to separate our Mobile Devices and Broadband & Mobility Solutions businesses follows a review process undertaken by our management team and Board of Directors, together with independent advisors," said Motorola CEO Greg Brown.
Brown added, "Our priorities have not changed with today’s announcement. We remain committed to improving the performance of our Mobile Devices business." He will become the CEO of the broadband & mobility solutions company, meaning the top position for the new mobile phone-specific company is currently vacant.
Earlier this year, rumors began circulating that Motorola would be spinning off its mobile phone division when it announced it was looking at ways to restructure its business. The move is likely due in part to pressure from billionaire investor Carl Icahn, who owns more than 6% of all Motorola stock. Icahn has been vocal for months about his desire for Motorola to split off its mobile phone business, and earlier this week filed a lawsuit against the mobile phone maker to obtain company documents.
Motorola rose to celebrity status in the cell phone market with the introduction of the Razr handset, but its bottom line began to fall with increased competition and the seeming inability to keep up with new market demands.
Last year, Motorola cut around 7500 jobs and former CEO Ed Zander stepped down. In its most recent quarter report two months ago, the company sustained operating losses of more than $300 million.
If the deal is approved, it is expected to be finalized some time next year. Motorola is hoping to let its current shareholders own stock in both of the new companies.