Motorola to split into two entities on 4 January

Motorola Inc, the once undisputed technology leader, yesterday announced that it will split into two separate companies Motorola Mobility and Motorola Solutions, effective 4 January 2011.

The Schaumburg, Illinois-based Motorola had announced plans in 2008 of splitting the phone unit from the rest of the company by the third quarter of 2009 (See: Motorola explores three-way split), but was forced to put the plan on hold since all its three major divisions, mobile devices, enterprise mobility, and home and networks mobility, were struggling and running into huge losses with the onset of recession.

Motorola's board of directors has approved the separation of Motorola Mobility Holdings, Inc. (Motorola Mobility) from Motorola, Inc. through a tax-free dividend involving the distribution of all Motorola Mobility common stock held by Motorola to Motorola stockholders and has also approved a reverse stock split of shares of Motorola common stock following the distribution.

Motorola stockholders will receive 1 share of Motorola Mobility common stock for every 8 shares of Motorola common stock they hold.

Immediately following the distribution of Motorola Mobility common stock to Motorola stockholders, Motorola will effect a 1-for-7 reverse stock split of Motorola common stock, which will become effective prior to the market open on 4 January 2011.

On 4 January, Motorola will change its name to Motorola Solutions, Inc. and will begin trading on the New York Stock Exchange under the ticker symbol MSI, and Motorola Mobility Holdings, Inc. will begin trading under the ticker symbol MMI.