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Moto Wants to Do the Splits

Jeff Baumgartner
2/11/2010
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For Motorola Inc. (NYSE: MOT), breaking up apparently won't be all that hard to do.

Following a string of rumors about what it would do that streched back to last November, the company came clean Thursday afternoon to announce that it would separate into two independent, publicly traded companies. (See Moto Set to Split Into Two .)

The plan is to complete the separation by the first quarter of 2011… so you can go ahead and stop holding your breath. Huawei Technologies Co. Ltd. , seen as a possible suitor as Motorola considered selling its Home & Networks Mobility division outright, isn't getting its mitts on any of it, at least for now. (See Huawei Seen as Likely Moto Suitor, Moto May Be Mulling Set-Top Sale, Is Moto Having Second Thoughts? , and What's Moto's Next Move?)

As the split goes, on one side will be the company's Mobile Devices and Home business (mobile handsets, set-tops, cable modems, etc.), focusing on this whole concept of service convergence. On the other will be its Enterprise Mobility Solutions and Networks businesses. Motorola had originally considered the idea of a simply spinning off its mobile unit from the rest of the company but is now taking a two-pronged approach. (See Motorola Delays Devices Unit Spinoff and Sanjay Jha Makes His Mark at Moto.)

Co-CEO Dr. Sanjay Jha has been tagged to helm Moto's Mobile Devices and Home business, with his counterpart, Greg Brown, set to helm the Enterprise Mobility Solutions and Networks unit.

As the separation goes, Motorola intends to handle the split through a tax-free stock dividend of shares in the new company to Motorola shareholders, aiming to have both sides "well capitalized" when the break happens next year.

Both entities will continue to use the Motorola brand, so, for those of you who are still partial to the Next Level Communications name from days of yore, keep on wishing.

Light Reading will have more details soon on the implications of the deal.

— Jeff Baumgartner, Site Editor, Light Reading Cable

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