Motorola Announces Separation Date - Analyst Blog

Yesterday, Motorola Inc. (MOT) declared the much-awaited date for splitting into two separate entities. This will happen on January 4, 2011  before the opening bell. Motorola had decided to split into two publicly traded and independent entities in January 2011. New segments will be called (1) Motorola Mobility, which will comprise Mobile Devices and Home Businesses and (2) Motorola Solutions which will comprise Enterprise Mobility Solutions and Networks Businesses.

The split will take place through a tax-free stock distribution to shareholders. Motorola's entire outstanding debt at the time of separation will be assumed by Motorola Solutions. Motorola has also decided to sell most of its Network businesses to Nokia Siemens Networks, a 50-50 joint venture between Nokia Corp. (NOK) and Siemens AG (SI), for $1.35 billion.

Management announced that the share distribution will be made on January 4, 2011 before the market opens to all existing Motorola shareholders of record as of the close of the market on December 21, 2010. Motorola shareholders will receive 1 share of Motorola Mobility common stock for every 8 shares of Motorola common stock they hold.

Immediately after that, the company will initiate a 1-for-7 reverse stock split of Motorola common stock, which will become effective before the market opens on January 4, 2011.

On January 4, 2011, Motorola Inc. will change its name to Motorola Solutions Inc., will have a new ticker symbol of MSI, and will continue to trade on NYSE. Similarly, Motorola Mobility Holdings, Inc will get the ticker symbol of MMI and will also trade on NYSE.

We remain positive about Motorola's proposed business restructuring and separation strategy. Business restructuring will enable the Mobile Devices and Home Businesses to provide advanced mobile media solutions and multi-screen technologies leveraging on the converged platform of seamless mobility, end-to-end video content delivery capabilities, and the Internet. On the other hand, the Enterprise Mobility Solutions and Networks Businesses will leverage the overall state-of-the-art wireless broadband mobility solutions architecture of Motorola.

 
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