Motorola's embedded and networking semiconductor business will be spun off as a separate entity.
Details of the proposed transaction were not provided in a press release yesterday, although Motorola is considering an initial public offering of its Semiconductor Products Sector (SPS), according to chairman and chief executive officer Christopher Galvin.
Motorola might sell a portion of the division to new investors through the IPO, and could distribute the remaining shares to existing shareholders as a tax-free transaction, said David Devonshire, executive vice president and chief financial officer.
The company has come to the conclusion that SPS would be better off on its own, and that Motorola's existing mobile phone and other communications business would benefit.
SPS will be able to expand its product lines and businesses if it has access to public capital. Motorola also believes the semiconductor industry is starting to rebound, which help drive up the value of the new company.
Tom Krazit writes for IDG News Service