It’s official: Motorola to split into 2 companies

By Wailin Wong
Posted Nov. 30, 2010 at 4:43 p.m.

Motorola Inc. said Tuesday it will officially split into two companies on Jan. 4, 2011.

The separation is a long time coming, as the Schaumburg-based technology company first announced the decision in March 2008. The complexity of the break-up and the global recession had slowed the process, which involved dividing up not just employees, but assets such as intellectual property and ownership of the Motorola brand.

Two publicly traded companies will emerge from the separation: Motorola Solutions, Inc., which will consist of the division that makes communications gear for public safety, government and enterprise customers; and Motorola Mobility Holdings, Inc., which will comprise mobile devices and television set-top boxes. In the split, Motorola Mobility will be spun off, with Motorola Inc. then changing its name to Motorola Solutions.

Both companies will trade on the New York Stock Exchange, with Motorola Solutions using the ticker symbol MSI and Motorola Mobility trading under MMI. Current co-chief executive Greg Brown will head Motorola Solutions, while co-CEO Sanjay Jha will lead Mobility.

The company did not provide an update on whether it will keep Mobility headquartered in the Chicago area. The mobile devices unit is currently based in Libertyville. Jha has been considering other locations, including San Diego, where he still maintains a residence.

Motorola executives say the separation makes sense because it splits the company’s disparate business units along natural lines of division. Mobility is much more consumer- and product-centric because of its emphasis on mobile phones. In contrast, Solutions’ portfolio of police radios, barcode scanners and rugged computers caters to government and industrial clients. Brown will also no longer have to worry about the mobile devices division, which for years siphoned off resources from the better-performing enterprise unit.

Investors that own Motorola Inc. stock as of Dec. 21, 2010 will receive one share of Motorola Mobility common stock for every eight shares of Motorola common stock they hold. After this distribution, Motorola will conduct a one-for-seven reverse stock split of Motorola common stock. Both transactions will take place before the market opens on Jan. 4.

The two companies will also begin trading separately on the NYSE on Jan. 4.

Motorola is undertaking the reverse stock split to boost its share price, as many institutional investors and brokerage firms are reluctant to buy or recommend stock priced in the single digits.

Motorola closed down 1.4 percent at $7.66 on Tuesday. The stock has traded below $10 since August 2008.

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  1. Innocent_III Dec. 1, 2010 at 8:52 a.m.

    Motorola is the loser that just keeps losing.

    Why would you call a business “Motorola SOLUTIONS”? Don’t ALL businesses claim to provide “solutions” to customer needs and wants? If “SOLUTIONS” is about public-safety equipment, why not call it something like “Motorola public safety systems”??

  2. TaxforOutsourcing Dec. 1, 2010 at 9:49 a.m.

    I thought they split years ago when they outsourced half of their jobs overseas to India, Ireland, Russia, etc. They think it is cheaper but their quality suffers. You get what you pay for, cheap products with cheap labor.