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Motorola spins off semiconductor division

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Motorola has announced its intentions to spin off its Semiconductor Products Sector (SPS) as an independent publicly-traded semiconductor company. Final details of the transaction were not disclosed.

CEO Christopher Galvin says the semiconductor giant is considering an initial public offering (IPO) of a portion of SPS, followed by a distribution of remaining shares to shareholders tax-free, subject to board approval, favourable market conditions, and other regulatory conditions.

With its own publicly traded equity, SPS will have the opportunity to pursue acquisitions of additional strategic product lines and technology using semiconductor equity valuations instead of the blended equity valuation of Motorola. In addition, the semiconductor industry cycle appears to be in an upswing; therefore, Motorola believes the time is right to take these actions, Galvin says.

“We are embarking on the creation of a new company, and we are excited about the opportunity ahead of us,” adds Scott Anderson, president of Motorola SPS. “We have a differentiated business model in ‘asset light’; an experienced, talented management team; an energetic workforce; and strategic and productivity initiatives already in place that are driving a sustainable difference in our approach to the semiconductor market.”

Motorola’s remaining portfolio includes mobile phones (the Personal Communications Sector), mobile network infrastructure (Global Telecom Solutions Sector), the Commercial, Government and Industrial Solutions Sector, the Integrated Electronic Systems Sector and the Broadband Communications Sector.

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