Motorola splits off two business units

Motorola Inc. will create two independent, publicly traded companies in a structural and strategic realignment of its business units.

The decision by the company's board of directors will separate Motorola's Mobile Devices business and its Broadband and Mobility Solutions business, which includes the government sector.

The Mobile Devices business designs, manufactures and sells mobile handsets and accessories worldwide.

The Broadband and Mobility Solutions business includes Motorola's Enterprise Mobility, Government and Public Safety, and Home and Networks businesses. They manufacture, design, integrate and service voice and data communications solutions and wireless broadband networks for enterprises, government and public safety customers worldwide.

They also provide end-to-end digital and IP video solutions, cellular and high-speed broadband network infrastructure, cable set-top receivers and associated customer equipment.

The decision "follows a review process undertaken by our management team and Board of Directors, together with independent advisers," Greg Brown, Motorola's president and chief executive officer, said in a statement. The two new companies would provide improved flexibility, more tailored capital structures and increased management focus, he said.

"As part of that effort, we have undertaken a global search for a new chief executive officer for the Mobile Devices business," Brown said.

The move follows Motorola's Jan. 31 announcement that it was considering a realignment of its business units.

Motorola said it expects the separation of the businesses to be completed in 2009, subject to various legal and fiduciary requirements, including those of the Securities and Exchange Commission and the Internal Revenue Service.

Motorola, of Schaumburg, Ill., ranks No. 38 on Washington Technology's 2007 Top 100 list of the largest federal government prime contractors.