Motorola Reacts to Icahn, Splits Off Handset Business
Ashley M. Heher, Associated Press Reporting
CHICAGO (AP) -- 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 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.
"Our priorities have not changed with today's announcement," Chief Executive Greg Brown said in a statement. "We remain committed to improving the performance of our Mobile Devices business by delivering compelling products that meet the needs of customers and consumers around the world."
Schaumburg-based Motorola said it hopes the transaction will be tax-free, allowing shareholders to own stock in both of the new companies. If the deal is approved, the two units would be separated in 2009.
Brown said Motorola will launch a search for a new chief executive of the Mobile Device business as it works to regain favor with customers and its No. 2 position in the cell phone market.
Motorola lost that spot last year to rival Samsung Electronics Co.
Finland's Nokia Corp. is the industry leader.
"We believe strongly in our brand, our people and our intellectual property, and expect that the Mobile Devices business will be well-positioned to regain market leadership as a focused, independent company," Brown said.
A message left with Icahn's office was not immediately returned.
Motorola shares climbed 66 cents, or 6.8 percent, to $10.42 in premarket trading.
Copyright 2008 The Associated Press. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed.
Family of Drowned Boy Makes Plea to City The family five-year-old Ronald Evans, Jr, who drowned in Jackson Park Harbor Thursday night, is appealing to city and Park District officials not to let it happen again.
Flooding Affects Homeless Pets The massive flooding in the Midwest not only destroyed homes and crops, it left a lot of animals homeless, many are up for adoption at PAWS Chicago. WBBM's Mary Francis Bragiel reports.
Drive 55 . . . And Save Gas? As Chicago-area drivers drive off on holiday celebrations, there are plenty of opinions about going back to a national top speed limit of 55 miles per hour. Virginia Senator John Warner is proposing a return to the speed limit Congress passed in the1974 energy crisis, to cut down on fuel usage. WBBM's Dave Berner has the story.
Con Man Nabbed The gig is up for a Milwaukee-area man whose acting skills saved him a lot of money. WBBM's Jackie Swike reports.
Family of Drowned Boy Makes Plea to City After hearing that the family did not know how they would pay for the boy's funeral...Funeral Director Spencer Leak Jr. approached NewsRadio 780 today and said he would pay for it
Amtrak
With Amtrak there are no tolls, traffic or weather issues to deal with. Just big, comfortable seats and miles of breathtaking views and spend real quality time with family and friends. Call Amtrak at 1-800-USA-RAIL or click on our web link.
WBBM-AM 780 has been the consistent all news radio voice in Chicagoland for over 35 years and is now streaming online for free. Listen online to Chicago news as it happens around the clock, along with Chicago traffic, Chicago weather, Chicago sports and Chicago business. Subscribe to WBBM's free podcasts for additional Chicago business and Chicago community reports and listen to Chicago news on demand. WBBM news radio is also the home for Chicago Bears, Chicago Auto Show and Chicago Air & Water Show. www.wbbm780.com
