Wednesday, March 26, 2008
Motorola Inc. announced plans to separate its struggling handset business from other operations Wednesday, forming two separate, publicly traded companies.
The cell phone unit has seen its sales and stock price plummet with the company unable to produce second act to the once-popular Razr phone.
Motorola said the handset business will operate separately from another company that will encompass its home and networks business, which sells TV set-top boxes and modems, and its enterprise mobility solutions, which sells computing and communications equipment to businesses.
Chief Executive Greg Brown said splitting the company would allow each unit to better focus on its own business, particularly improving the struggling cell phone division.
"The creation of the two independent publicly traded companies provides improved management focus and a capital structure that's more tailored to the individual business needs," he said during a conference call. "And it will provide some improved alignment and agility and will help us going forward."
Schaumburg-based Motorola said it hopes the transaction will be tax-free, allowing shareholders to own stock in both of the new companies. If the deal is approved, the two units would be separated in 2009.
By: DocMemory
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