Motorola details breakup plans

Its consumer businesses will become Motorola Mobility while the rest of the company is renamed Motorola Solutions

Motorola this week gave more details of its planned reorganization, saying it will spin off its mobile devices and home products business into a new entity called Motorola Mobility.

The current corporation will retain the enterprise and carrier infrastructure businesses and be renamed as Motorola Solutions.

Motorola announced Thursday it had filed a Form 10 Registration Statement with the Securities and Exchange Commission, the latest step toward the breakup it plans to carry out in the first quarter of next year. The Form 10 provided information about Motorola SpinCo Holdings, which the company created to carry out the spin-off of Motorola Mobility.

In February, Motorola announced that early next year it would be split into two companies through a tax-free stock dividend of shares to current shareholders. The company said then that it hadn't determined which entity would be spun off and which would remain within Motorola.

Motorola Mobility will make handsets and home entertainment equipment, such as TV set-top boxes. One of its goals will be to provide "multiscreen" experiences in which consumers can view content on phones, TVs and other devices. The new entity will be led by Sanjay Jha, who is currently co-CEO of Motorola and the CEO of its Mobile Devices and Home businesses. Motorola has fallen from its heights of several years ago in the mobile-phone business but expects to turn a profit in that area by the end of this year.

Motorola Solutions will consist of the company's current Enterprise Mobility Solutions and Networks units, which make wireless LAN gear, public safety communications equipment and service-provider networks. It will be run by Greg Brown, who is a co-CEO of Motorola as well as CEO of the current divisions.

One reason the company is being split in this way is that products for carrier, public safety and enterprise networks all are sold in long-term deals and require complex integration work, while mobile phones and home entertainment gear are not, the company said in February.

In the first quarter of this year, Motorola earned US$0.03 per share on sales of $5 billion, with each division except Mobile Devices reporting an operating profit.

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Stephen Lawson

IDG News Service
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