Motorola to Split Into Two Companies Next Year

Authored by Mark Hefflinger on March 26, 2008 - 1:01pm.

Schaumberg, Ill. - Motorola (NYSE: MOT) announced plans on Wednesday to split into two publicly-traded companies next year, one for its mobile device business and another for its broadband and mobility solutions. "Creating two industry-leading companies will provide improved flexibility, more tailored capital structures, and increased management focus - as well as more targeted investment opportunities for our shareholders," said Greg Brown, Motorola's president and CEO.

Brown was named to head the broadband and mobility solutions business, while the company said it has begun a search for a new chief executive to lead the device business.

The move by Motorola comes after pressure exerted by billionaire Carl Icahn, a vocal investor, who called the move "much delayed and long overdue," but "clearly a step in the right direction" in an open letter to Motorola's board on Wednesday.

The split is expected to take the form of a tax-free distribution to Motorola's shareholders, resulting in their holding shares of two independent and publicly-traded companies.