Motorola renames businesses in preparation for split

Motorola Inc. is laying the groundwork for its separation early next year by renaming its businesses and establishing a new holding company, the Schaumburg-based company said in a federal filing Thursday.

The mobile phone and home businesses together will be called Motorola Mobility, led by CEO Sanjay Jha. The Enterprise Mobility and Networks businesses together will be called Motorola Solutions, led by CEO Greg Brown.

"We are very pleased with the significant financial and operational progress that Greg's and Sanjay's businesses have accomplished. Upon separation both businesses will be well capitalized and poised for stand-alone success," David Dorman, chairman of Motorola's board of directors, said in a statement.

Motorola announced earlier this year that it intended to separate into two publicly traded companies by the first quarter of 2011 and would provide more details this summer.

As part of these efforts, Motorola established a wholly owned subsidiary, Motorola SpinCo Holdings Corp., which filed a registration statement with the U.S. Securities and Exchange Commission.

The filing on Thursday also outlined how shareholders would be affected. Motorola intends to distribute shares in Motorola SpinCo that are tax-free to Motorola stockholders for U.S. federal income tax purposes. Shares will be distributed on a pro-rata basis, the filing said.

So Thursday's news wasn't a surprise, said Mark McKechnie, an analyst with Gleacher & Co.

"It's good to see it's on track for separation," said McKechnie.

Completion of the separation is subject to final approval by Motorola's board of directors, Motorola's receipt of an IRS ruling or opinion of counsel that the distribution will qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, and effectiveness of the Form 10 registration statement filed with the SEC.

No assurances can be given that the separation will be consummated, the filing said.

Approval by Motorola's stockholders is not required for the separation, the company said.

A company spokeswoman did not immediately respond a question about how the names, including Motorola SpinCo, were chosen.