The company has hired JPMorgan Chase, Centerview Partners and Goldman Sachs to seek buyers for its division that manufactures set-top boxes for cable television companies and radios to go into cellphone transmission towers. "The businesses up for sale could be worth as much as $5 billion," said Philip Cusick, Analyst for Macquarie Capital.
The company is not expected to begin the separation process, however, until the finances of the handset unit stabilize, perhaps in mid-2010. Some of the analysts said that a final split-up is not expected until 2011 at the earliest.
After a long slide, Motorola has high hopes for turning around its cellphone business. It recently introduced two smartphones, including the Droid, which is being promoted by Verizon Wireless. Motorola promises dozens more smartphones in the next year.
Motorola got into the cable box business in 2000, when it acquired General Instruments for $17 billion. Prospects for that business may be dimming, however, in part from more aggressive competition from its main rival Cisco Systems. Moreover, the rise of video delivered over the internet may undercut the traditional cable TV model.
Motorola's telecom equipment business has also had its share of troubles. It primarily supplies radios to wireless carriers that use an older technology. The company's bankers are also approaching private equity firms, including TPG and Silver Lake Partners.
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