SCHAUMBURG, IL – Motorola Inc. announced Wednesday it will separate its mobile devices unit from its broadband and mobility business and create two independent, publicly-traded companies.
“Our decision to separate the businesses follows a review process undertaken by our management team and Board of Directors, together with independent advisors,” said Greg Brown, Motorola’s president and chief executive officer.
“Creating two industry-leading companies will provide improved flexibility, more tailored capital structures, and increased management focus – as well as more targeted investment opportunities for our shareholders,” Brown said in a statement.
Based on current plans, the creation of the two stand-alone businesses is expected to take the form of a tax-free distribution to Motorola’s shareholders, subject to further financial, tax and legal analysis, resulting in shareholders holding shares of two independent and publicly-traded companies.
“Our priorities have not changed with today’s announcement,” Brown said. “We remain committed to improving the performance of our mobile devices business by delivering compelling products that meet the needs of customers and consumers around the world. As part of that effort, we have undertaken a global search for a new chief executive officer for the mobile devices business. We believe strongly in our brand, our people and our intellectual property, and expect that the Mobile Devices business will be well-positioned to regain market leadership as a focused, independent company.”
The completion of any separation transaction would be subject to certain customary conditions, including implementation of inter-company agreements, filing of required documents with the Securities and Exchange Commission and receipt of an opinion of counsel or a ruling from the Internal Revenue Service as to the tax-free nature of any transaction.
Motorola said it expects the separation of its businesses would take place in 2009, adding there can be no assurance that any separation transaction will ultimately occur or, if one does occur, its terms or timing.
www.motorola.com
