Motorola to divide into two independent companies
After two years of discussions, Motorola has finally agreed to split into two independent companies in the first quarter of 2011. One company will focus on cellphones and television set top boxes, while the other on enterprise networking.
The split is a result of poor sales of mobile devices and set top boxes, while its wireless network equipment business has been hit by a consolidation among telecom operators.
Greg Brown (pictured), co-chief executive officer of Motorola will now become ceo of the enterprise mobility and networking business. Brown said: "We believe that as independent companies, each business will be best positioned to successfully pursue the respective strategies and opportunities for growth."
Motorola announced that the move will take effect through a tax free stock dividend of shares in the new company. The company said its enterprise and network equipment business will be the entity responsible for Motorola's current public debt and will be capitalised to achieve an investment grade rating.