Motorola to Spin Off Chip Operations
Spin-off will allow the company's Semiconductor Products Sector to conduct its own business deals.Motorola Inc. said Monday it will spin off its chip operations into a separate company, prepping the spin-off for a public offering at a future date. The spin-off will give the companys Semiconductor Products Sector (Motorola SPS) the freedom and leverage to conduct its own business deals, using capital it can raise from the public markets. Current SPS President and CEO Scott Anderson will lead the new unit, which does not yet have a name. Motorola officials said the uptick in the chip sector made the time right for Motorola to spin off its chip business, given that the SPS subsidiary has historically negotiated its own technology sharing agreements and other deals. Motorola said it was considering a public offering of a portion of the SPS unit, using the capital for acquisitions and to develop new intellectual property.
"Over the past several months, we have carefully weighed the best way to optimize the long-term potential of Motorolas semiconductor business with the leverage we would gain by concentrating our resources on our communications products and integrated electronic systems businesses," Christopher Galvin, outgoing president and CEO at Motorola, said in a prepared statement. "After completing our four-month-long technology and strategic reviews in August, I recommended to the board of directors in September that Motorola focus its future on retaining and augmenting all five Motorola sectors that compose our communications products and integrated electronic systems businesses and that our asset light semiconductor business could prosper as a separate entity. Our board of directors has given its full support to this recommendation."