Motorola to split in January

By Wailin Wong
Posted Nov. 15, 2010 at 1:10 p.m.

Motorola will separate into two publicly traded companies in January 2011, co-Chief Executive Greg Brown said Monday.

The Schaumburg-based company had said it was targeting the first quarter of next year for the split. Monday’s announcement, made at a financial analysts’ meeting in New York, marked the first time the company specified a timeframe in the first quarter.

Motorola will become Motorola Solutions and Motorola Mobility. Motorola Solutions, to be led by Brown, will encompass communications infrastructure, equipment and software for government and industrial customers. Motorola Mobility, headed by co-CEO Sanjay Jha, will comprise mobile devices and television set-top boxes.

Motorola first announced it was separating in March 2008. The process has taken more than two years because of its complexity, as well as the effect of the global recession. The rationale for the split is that each company will have better focus, since one caters to the enterprise market and the other is consumer-centric. The separation is also expected to boost each new company’s stock. Motorola’s shares were long dragged down by the woes of its mobile-device division, which siphoned a significant amount of resources from the company’s better-performing units.

“We’re here. This is our moment,” Brown said of Motorola Solutions,  the focus of Monday’s analyst meeting.

“What we do, which often isn’t well understood in the context of mother Motorola, is complex and custom – not commodity,” Brown added.

Executives said Motorola Solutions will be an $8 billion company with about $5.3 billion in cash and about $2.9 billion in debt after it becomes independent, with investment-grade credit ratings.

Sales at Motorola Solutions are projected to grow organically — that is, without taking into account any acquisitions — at an annual rate of 5 to 8 percent, executives said. Operating margins are expected to come in at 16 percent in 2011 and eventually rise to 18 percent.

Read more about the topics in this post: ,

Companies in this article


Read more about this company »

Motorola Mobility

Read more about this company »

Motorola Solutions

Read more about this company »

Comments are closed.