Motorola Incorporated announced it would split into two publicly traded companies to separate its loss-making mobile telephone business from is other divisions. The news sent Motorola shares 5 percent higher in morning trading. The move could signal Motorola's willingness to engage in a joint venture for its mobile telephone business, analysts said. Separating the telephone business, which has been losing market share to rivals like Nokia and Samsung, could help Motorola find a strategic investor. Motorola, the third-biggest mobile telephone maker, said the split would be in the form of a tax-free distribution to its shareholders and expected it to be completed in 2009. The company already has begun looking for a new executive for its mobile-devices business. “We expect this action to enhance recovery in mobile devices and accelerate efforts to attract a new leader,” chief executive Greg Brown told analysts. He did not provide details on the new capital structure or how shares would be allocated to existing shareholders, saying such details would be determined in the coming months. Motorola's mobile devices will be split from its Broadband & Mobility Solutions business, which consists of its network equipment and public safety divisions. Shares of Motorola, which has a market value of about $22 billion, have fallen over 60 percent since October 2006 amid mobile-telephone market share losses and criticism for failing to unveil a strong successor to the once-popular Razr handset.
