“Our decision to separate our Mobile Devices and Broadband & Mobility Solutions businesses follows a review process undertaken by our management team and board of directors, together with independent advisors,” Motorola chief executive and president Greg Brown said in a statement.<\/p>\n
The separation is expected to take the form of a tax-free distribution to Motorola's shareholders, who would then own shares of two independent and publicly-traded companies, Motorola said.<\/p>\n
The company had announced on January 31 that it was studying a possible breakup in an effort “to recapture global market leadership” in the mobile phone market and enhance shareholder value.<\/p>\n
Motorola, once the world's second-largest mobile phone maker, after Nokia Corp. of Finland, has since lost its place to South Korean rival Samsung Electronics Corp. amid fierce global competition and watched earnings slide.<\/p>\n
The company lost 49 million dollars in 2007, swinging to a deficit after a profit of 3.6 billion dollars in 2006 as its problems worsened in the tough market for mobile devices.<\/p>\n
Motorola said it expects the split to take place in 2009 after meeting certain conditions, including implementation of inter-company agreements, filing of required documents with the Securities and Exchange Commission and receipt of a legal opinion or an Internal Revenue Service ruling as to the tax-free nature of any transaction.<\/p>\n
“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.<\/p>\n