Motorola Splitting into Two Independent Companies
March 28, 2008
Motorola Inc. on March 26 announced its board has commenced a process to create two independent, publicly traded companies, one focused on mobile devices and the other focused on broadband and mobility products, including cable set-top boxes.
The decision follows the U.S.-based company’s Jan. 31, 2008, announcement that it was evaluating a structural and strategic realignment of its businesses.
“Our decision to separate our mobile devices from the broadband and mobility solutions businesses follows a review process undertaken by our management team and Board of Directors, together with independent advisors,” said Greg Brown, Motorola’s president and CEO. “Creating two companies will provide improved flexibility, more tailored capital structures, and increased management focus, as well as more targeted investment opportunities for our shareholders.”
Based on current plans, the creation of the two stand-alone businesses is expected to take the form of a tax-free distribution to Motorola’s shareholders, subject to further financial, tax and legal analysis, resulting in shareholders holding shares of two independent and publicly-traded companies.
Motorola once lead the U.S. market in mobile telephones, but it lost market share to foreign competitors like Nokia.
“We remain committed to delivering compelling products that meet the needs of customers and consumers around the world,” said Brown. “As part of that effort, we have undertaken a global search for a new chief executive officer for the mobile devices business, which we expect will be well-positioned to regain market leadership as a focused, independent company.”