In what might be the first stamp of Edward Zander, new chief executive officer, Motorola Inc. said it has filed with the Securities and Exchange Commission a $2 billion initial public offering for its proposed chip unit spinoff.
The new company, which bears the temporary name of SPS Spinco, was first announced in October. The definitive name will be announced before the real offering, said the company.
The new company is expected to be one of the top semiconductor companies in the world and will do battle with such bellwethers as Intel Corp., Texas Instruments and STMicroelectronics.
The unit was the only major part of Motorola to suffer an operating loss in the third quarter, but the company needs it to fly high to enhance the profile of the handset division. The company’s handset performance lags behind Nokia Corp. and needs to hold its own against hard-charging players like Samsung Electronics, Siemens AG and LG Electronics.
Motorola said it will own all outstanding shares known as Class B after the IPO and distribute all its ownership to its common shareholders in a tax-free spinoff by the end of next year.
“Completion of the distribution is contingent upon the satisfaction or waiver of a variety of conditions, including among other things, the receipt of a favorable tax ruling from the IRS and/or a favorable opinion of Motorola’s tax advisor as to the tax-free nature of the distribution for U.S. federal income tax purposes,” said the company. “As a result, the distribution may not occur at the contemplated time and may not occur at all.”
The unit, which came into being in 1953, went through a series of cost-cutting measures that includes a workforce slash of about 11,000 staff. It has 23,000 workers and has reduced its facilities to 10 from 22.
