US telecom group Motorola Inc yesterday said that it would split into two independent, publicly traded companies.
"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.
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.
The company had announced on Jan. 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.
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 has watched earnings slide.
The company lost US$49 million last year, swinging to a deficit after a profit of US$3.6 billion in 2006 as its problems worsened in the tough market for mobile devices.
Motorola said it expected the split to take place next year after meeting conditions including the 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 on the tax-free nature of any transaction.
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