Motorola Inc. plans to spin off its mobile phone and television set-top box businesses with $3.5 billion in cash when the Schaumburg-based company splits in two early next year.
Motorola SpinCo Holdings Corp., the entity created in preparation of the separation, disclosed the capitalization amount in a Tuesday filing with the U.S. Securities and Exchange Commission.
The split is targeted for the first quarter of 2011 and will put the mobile devices and home units in one publicly traded company called Motorola Mobility, with the remaining business – the division that makes communications gear for public safety agencies and industrial clients – being renamed Motorola Solutions.
The $3.5 billion in cash and cash equivalents is only an estimate and is subject to a final decision by Motorola and its board of directors, the company said in the filing. The initial influx of capital is expected to help fund ongoing operations, capital expenditures and strategic investments.
Motorola shareholders will receive a distribution of shares in the new company. Motorola Mobility will be listed on the New York Stock Exchange under a to-be-determined ticker symbol, the filing said. Motorola Solutions will also change its trading symbol from the company’s current “MOT” to another ticker.
Motorola co-Chief Executive Sanjay Jha, who will lead Motorola Mobility after the spin-off, has been rehabilitating the mobile devices unit’s operations and finances over the last year.
The company has produced several smart phones based on Google’s Android mobile operating platform that have drawn praise from reviewers and consumers, and Jha expects mobile devices to be profitable in the fourth quarter of this year.
