Motorola to put up to $4 billion in new cellphone company

21st June, 2010 by adina
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Motorola will split off in 2011 and will bring $3 up to $4 billion into the cellphone business. A report of Wall Street Journal reveals that this will happen after buying back most of the company’s debt. The new firm is supposed not to have any obligations like pension liabilities in order to have the best chances of success.

A company’s spokesperson affirmed that the leaders of the company share a common vision and work together, motivating their teams too in order to make each business able to succeed and stand alone. An eventual split has been discussed since 2008, when investor Carl Icahn said the company would be more successful when separated. The loss of the cellphone business was about $5 billion during the last three years as devices belonging to the competition have proved to be more popular.

The new entity would be named Motorola Mobility and would focus on mobile phones as well as cable set-top boxes. It is expected to have the necessary resources to implement acquired technologies or to create its own. This way it would position on the offensive side.

The second company would be called Motorola Solutions and would receive any remaining money. It would also be charged with liabilities like pensions and others, as sources close to the business say. It would produce telecommunications network hardware, handheld scanners and public safety radios. Motorola Solutions is the breadwinner and has had a revenue reaching $11.1 billion last year.


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