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Motorola tugs itself to bits in mobo-go-solo schism pact

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Motorola will be splitting into two companies on 4 January, with existing shareholders getting a piece of the handset manufacturer, and the radio specialist, in exchange for their holding.

The two companies, Motorola Mobility and Motorola Solutions, will start trading on 4 January, with owners of Motorola shares getting one Mobility share for every eight Motorola shares they own, and one Solutions share for every seven, and the fractional remains being sold off as soon as practically possible.

Motorola has been trying to get shot of its loss-making mobile division for years, but gave up trying to find a buyer in January. A month later the company set out the plan now being enacted, as well as bumping up Sanjay Jha's compensation plan should the split succeed (or fail: Sanjay Jha is a quality negotiator). The schedule called for the two companies to separate in the first quarter of 2011, so 4 January is actually ahead of schedule.

Motorola sold off its telecommunications infrastructure to Nokia Siemens in the middle of the year, and while that transaction hasn't yet completed, it is expected to happen any day now. So with mobile phones and home electronics going into Motorola Mobility, that just leaves governmental and enterprise services with Motorola Solutions - a small part of the existing business, but a profitable one.

The majority of the patents – 24,500 of them – end up with Motorola Mobility, allowing that unit to continue with the various court actions with which Motorola has been involved and "in part to mitigate certain intellectual property risks associated with operating as a new entity". Motorola Solutions gets thousands of patents too, but will probably concentrate on serving customers rather than suing the rest of the industry.

Motorola has provided an FAQ with more details for investors, along with detailed dates and trading symbols for the new companies. ®

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