Motorola's formal split into two companies will mark the final step in the years-long break-up of a consumer electronics industry pioneer.
Motorola began selling car radios in the 1930s and expanded into TVs in the 1940s and mobile phones in the 1980s. The company has become increasingly diverse, and the break-up that began in 2008 is motivated by a desire to present two simple businesses to investors rather than one complicated one.
Motorola is splitting its consumer-oriented side, which makes mobile phones and TV set-top boxes, from the professional business of selling police radios and barcode scanners to government agencies and large companies. The new companies will be called Motorola Mobility and Motorola Solutions.
The two companies will begin trading on the New York Stock Exchange on Tuesday, allowing new investors to buy shares.
Motorola shareholders will receive one share of Mobility for every eight shares of Motorola Inc they already held. Motorola Inc shares will then go through a 1-for-7 reverse split and become Motorola Solutions shares.
Existing investors have already been trading stock in the newly formed companies on a "when issued" basis for almost a month.
Although "when issued" trades will not be settled until later when the split becomes official, these preliminary moves help decide how Motorola's roughly 21 billion dollar market cap would be divided between the two companies.
In trading on Monday, shares of Mobility jumped 1.14 dollars or nearly 4pc, to close at 30.24 dollars, putting the value of the company at about 8.9 billion dollars. Mobility shares gained 21pc since they started trading on a "when issued" basis in December.
Solutions' shares fell 57 cents, or 1.5pc, to 37.48 dollars, for a total market cap of about 12.6 billion dollars. Shares have lost 8pc in the last month.
As part of the break-up, Motorola is also selling off a division that makes network equipment for cell phone companies to Nokia Siemens Networks, a Finnish-German joint venture. Regulators in China are still reviewing the deal, which is expected to close in the next three months.
Motorola's professional business has become the crown jewel of Motorola's portfolio, while its mobile phone business is just emerging from a long slump.
The divisions that will become Motorola Mobility had 2.9 billion dollars in sales in the most recent quarter, compared with 1.9 billion dollars for the Motorola Solutions segments. However, the 321 million dollars in operating earnings at Solutions was much stronger than the 3 million dollars that Mobility made.