Motorola to spin off cellphone business?
Schaumburg (IL) – In a stunning move announced late Thursday, Motorola said that it will “evaluate alternatives to (…) recapture growth and profitability” in its Mobile Devices business. The announcement is expected to result in a sell-off or spin-off of its cellphone business.
Motorola said that it has begun “exploring the structural and strategic realignment of its businesses to better equip its Mobile Devices business to recapture global market leadership and to enhance shareholder value.” The company said that such alternatives may include “the separation of Mobile Devices from its other businesses in order to permit each business to grow (…)”.
Motorola’s Mobile Devices account for about 50% of the firm’s sales, which were $9.6 billion in the fourth quarter of 2007.
Billionaire financier Carl Icahn, who currently holds 2.9% of Motorola, was among the first to react to Motorola’s announcement : “For many months I have been publicly advocating the separation of Mobile Devices from Motorola’s other business and I am pleased to see that Motorola is finally exploring that proposal. However, we have previously informed Motorola that we expect to run a slate of directors for the upcoming annual meeting and this announcement by Motorola will not deter us from that effort - we believe Motorola is finally moving in the right direction but certainly still has a long way to go."