Motorola To Split Into Two Entities

Motorola, one of the leading telecommunications company in the world, has announced that the company will be splitting in two at the beginning of 2011, with one part focusing on mobile phone and set-top boxes product offerings and the other focusing on divisions that are meant for business customers.

According to a statement released by the company, as far as shareholders are concerned, they will be given share in both the companies depending on their current share holdings.

The two companies that will be formed will be of the same size based on the revenue, which will be almost $11 billion (£7 billion) each.

The company’s decision to split in two will leave the two co-CEO’s Sanjay Jha and Greg Brown, in charge of the two companies that will be formed.

Mr. Sanjay Jha will be appointed the CEO of Motorola’s mobile devices and set-top boxes half while Greg Brown will be leading the business products half.

Expressing his views on the issue, Greg Brown said in a statement that “We believe this configuration is cleaner and more compelling for customers and investors. We do anticipate that both business segments will have positive operating cash flow moving forward.”

Our Comments

Shares of Motorola went up sharply - by 8 percent - after the announcement as this could well mean that Motorola could get a suitor very, very soon. The spun-off mobile phone division would be worth roughly $8 billion, with revenues of $11 billion and could prove to be an attractive target for a much bigger fish.

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