Motorola to split into two companies
Updated: 2008-03-26 23:51
Motorola plans to separate its Mobile Devices unit from its Broadband & Mobility Solutions business. The latter consists of its network equipment, enterprise and public safety businesses. Brown did not give details on the branding strategy for each business, beyond saying the Motorola brand is important for the mobile devices business.
Shares of Motorola, which has a market value of about $22 billion, have fallen more than 60 percent since October 2006, amid handset market share losses and criticism for failing to come up with a strong successor to the once-lauded Razr phone.
The stock was up 5.12 percent at $10.26 in early trading on the New York Stock Exchange, after rising more than 10 percent in pre-market trading.
Some analysts, however, were not convinced of the positive impact of the planned company split.
"In the short term restructuring is not helping Motorola on the operational level. Probably, the first quarter is weak for Motorola, which relatively could benefit others," said Carnegie analyst Janne Rantanen.
The news came as some analysts lowered their already weak estimates for Motorola's handset sales for 2008. UBS analyst Maynard Um cut his estimate to 130.2 million units for the year, from 145.6 million. Brown declined comment on guidance.
Motorola is engaged in a proxy battle with Icahn, who owns a 6.3 percent stake. He has proposed a slate of four directors to the board and is suing Motorola to force it to hand over documents related to its mobile devices business.
Icahn was not immediately available for comment on Wednesday. He told Reuters in an interview on Monday that he would not be satisfied unless Keith Meister, chief executive of Icahn Enterprises and manager of Icahn's $8 billion fund, became a director of Motorola.
Motorola said on Wednesday there was no assurance the planned split, which is subject to further financial, tax and legal analysis, would occur.
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