Motorola Inc. announced plans to separate its struggling handset business from other operations Wednesday, forming two separate publicly traded companies after months of agitation from frustrated investors.
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. The cell phone unit has seen its sales and stock price plummet with the company unable to produce second act to the once-popular Razr phone.
Motorola said the handset business will operate separately from another company that will encompass its home and networks business, which sells TV set-top boxes and modems, and its enterprise mobility solutions, which sells computing and communications equipment to businesses.
Last year, the company pulled back from developing markets, cut 7,500 jobs and CEO Ed Zander resigned.
A flock of executives have left the company this year, and more cuts and changes are likely as the new management team scrambles to retain control in the face of a revived threat from Icahn.
Icahn, who has been steadily increasing his Motorola position, disclosed in a filing this month that he now owns 142,362,000 million shares, or 6.3 percent – up from 5 percent a month ago.
Wednesday’s announcement came two days after Icahn sued Motorola, seeking documents about its executives and its cell phone business.
source:tech2