Motorola (NYSE:MOT) is going to give $3.5 billion to Motorola Mobility, the company that will contain its handset and set-top box units when it separates in the first quarter of next year, according to a filing.
In an interview with Bloomberg, Marc Rothman, the CFO of Motorola Mobility, said the cash will be used to operate and expand the businesses and help pay for acquisitions. The new company might make small software acquisitions, he added.
Motorola, which will give stock in the new company to current shareholders, is buying back most of its debt in preparation for the move. Motorola co-CEO Sanjay Jha said in July that when Motorola Mobility launches it will have no debt.
Greg Brown, Motorola's other-CEO, will lead Motorola Solutions, which will be focused on enterprise mobility and Motorola's legacy businesses. Nokia Siemens Networks agreed in July to buy Motorola's wireless networks business for $1.2 billion.
As it heads toward a separation that has been years in the making, Motorola has been getting back in financial shape. The company said that in the first half of 2010, the net loss at its handset and set-top box units narrowed to $132 million, from $885 million a year earlier. Additionally, Jha has said that the handset unit, which has been churning out smartphones running Google's Android platform, will be profitable in the fourth quarter of this year.
- see this Bloomberg article
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