Motorola (NYSE: MOT) announced plans to divide itself into two publicly listed companies–one focusing on mobile phones and the other on broadband and mobility devices. The rigorous process of separating the businesses according to Dow Jones – which could take roughly a year – will provide a loud distraction at a time when Motorola needs to focus on execution.
Motorola argues that the separation of the handset business will allow it to hire a “world class CEO,” allow management to better focus on bringing out better products and accelerate the pace of its turnaround.
The suburban Chicago-based cell phone maker has been under pressure from billionaire investor Carl Icahn for changes meant to revitalize its cell-phone business. Motorola shares have fallen more than 60 percent since October 2006, amid criticism for failing to produce a credible follow up to the initially successful RAZR handset.
Chief Executive Greg Brown said during a conference call that “the creation of the two independent publicly traded companies provides improved management focus and a capital structure that’s more tailored to the individual business needs, and it will provide some improved alignment and agility helping us going forward.”
Wednesday’s announcement came two days after Icahn sued Motorola, seeking documents about its executives and its cell phone business.
MOT shares currently up $0.22 @ $9.98, although they peaked at $10.35 earlier in the session.
