Motorola Splitting Off Its Enterprise Business Officially on Jan. 4
On Jan. 4, Motorola will split off a portion of its enterprise business into a separately traded company. The move will reportedly help it to better focus on customers.
Motorola has announced that its planned separation into two companies will occur Jan. 4, despite hopes of completing the transition by year's end. The company will separate its consumer side, which makes products such as the successful Droid and Droid 2 smartphones, from a side that sells enterprise equipment.
Greg Brown will be the co-CEO of Motorola and CEO of Motorola Solutions, and Sanjay Jha-Motorola's current CEO-will be a Motorola co-CEO and CEO of Motorola Mobility. The split, the two said in a Nov. 30 statement, "is expected to benefit Motorola, its stockholders, as well as each company's respective customers and employees.
Motorola first announced the plan in February. David Dorman, chairman of Motorola's board of directors, said in a statement at the time, "We believe this structure provides significant operational and strategic flexibility for both companies, positions them for future success and enhances long-term shareholder value." According the Associated Press, the split also comes following pressure from investor Carl Icahn, who as of August owned more than 10 percent of the company.
"The strategy of Motorola Inc. and the decision we've made was all driven for all the right reasons," Gene Delaney, executive vice president of Product & Business Operations for Motorola Solutions, told eWEEK. "It was not driven by any specific person. It was a holistic strategy focused on how best can we serve our customers. It's all about focus, and now we can have a laser focus on our customers on both ends of the business."
Delaney said that Motorola continues to "strengthen and expand" its Solutions portfolio, and that, despite difficult global economic times, "like last year," Motorola invested in the business the same dollar amount that it had in past years. The company, he added, continues to be committed to providing enterprise and government customers with "compelling solutions" and to "helping our customers to perform better."
The lesser-known Motorola Solutions side of the business will feature a growing portfolio of products, said Delaney, that includes radio-based products spanning from the sophisticated, multi-band radios used by firemen, to the two-way radios popular in fields such as construction and even simpler two-way radios often used by restaurant workers.
"It's the entire array of radio communication products," said Delaney, "and also all of the systems that support those products." These include government-geared products Motorola calls "mission critical," as well as advanced data capture products and WLAN products that additionally offer 802.11e and security offerings that it can now make available following its July 2008 acquisition of Air Defense.
"What I'm excited about is not only the specific solutions [Motorola now offers," said Delaney, "but that we're now tying these together very holistically."
On Jan. 4, shareholders will receive one share of Motorola Mobility for every eight shares of Motorola Inc. Then, Motorola Inc. shares will effect a 1-for-7 reverse stock split, as the company becomes renamed Motorola Solutions.