Goodbye Moto?11/11/2009 12:51 PM Eastern
Motorola is reportedly exploring a sale of its Home and Networks Mobility unit, which includes its set-top box and mobile-phone network equipment operations, and has hired investment bankers JP Morgan Chase and Goldman Sachs as advisers.
According to a report in The Wall Street Journal citing people familiar with the matter, Motorola is in the early stages of seeking a buyer for its Home and Networks Mobility division. The Journal reported that Motorola is seeking $4.5 billion for the unit.
Home and Networks Mobility accounted for $2 billion of Motorola's $5.5 billion in sales in the third quarter. Last year, it was the second-largest unit in the company, generating $10.1 billion of revenue.
According to The Journal, the decision to explore a sale comes after attempts to spin off its mobile handset unit have stalled.
In a statement, Motorola said it would not comment on rumor and speculation, but remains resolute in its wont to split into two separate companies -- mobile devices and broadband mobility solutions).
"We remain committed to the separation goal and continue to believe that it is the right strategy to position Motorola for long-term success," the company stated.
The Journal said a sale of the unit could pump some needed cash into Motorola, helping reverse what has been a downward spiral at its wireless handset unit. Sales at the Mobile Devices division, which includes wireless handsets, dipped 46% in the third quarter.
Still, the Home and Networks Mobility unit has not been unscathed by the recession. Revenue was down 15% in the third quarter and operating earnings at the unit were down 24% to $199 million from $263 million in the prior year.
Motorola is a major supplier of set-tops to the cable, satellite and telco video industries -- it shipped 18 million set-top boxes in 2008, up 19% from the prior year.