Now, Motorola explores to split into 3 companies
By siliconindia   |   Thursday, 12 November 2009, 15:25 IST   |    3 Comments
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Now, Motorola explores to split into 3 companies
Illinois: Motorola, which has said that it wanted to split into two separate companies, is now exploring a three-way split instead, in order to raise cash and pay down debt, reports The New York Times. The company has hired JPMorgan Chase, Centerview Partners and Goldman Sachs to seek buyers for its division that manufactures set-top boxes for cable television companies and radios to go into cellphone transmission towers. "The businesses up for sale could be worth as much as $5 billion," said Philip Cusick, Analyst for Macquarie Capital. Last year, Motorola had said that it wanted to separate its struggling cellphone handset unit from the rest of the company, which includes a third business unit that sells two-way radios to businesses and government agencies. "Even if it sells the set-top box and communications equipment unit, the company would still likely separate the two remaining divisions," said Cusick. The company is not expected to begin the separation process, however, until the finances of the handset unit stabilize, perhaps in mid-2010. Some of the analysts said that a final split-up is not expected until 2011 at the earliest. After a long slide, Motorola has high hopes for turning around its cellphone business. It recently introduced two smartphones, including the Droid, which is being promoted by Verizon Wireless. Motorola promises dozens more smartphones in the next year. Motorola got into the cable box business in 2000, when it acquired General Instruments for $17 billion. Prospects for that business may be dimming, however, in part from more aggressive competition from its main rival Cisco Systems. Moreover, the rise of video delivered over the internet may undercut the traditional cable TV model. Motorola's telecom equipment business has also had its share of troubles. It primarily supplies radios to wireless carriers that use an older technology. The company's bankers are also approaching private equity firms, including TPG and Silver Lake Partners.

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