December 17, 2003 12:15 PM PST
Motorola chip unit files $2 billion IPO
The stock offering, underwritten by The Goldman Sachs Group, is expected sometime next year. The filing didn't divulge the price per share or give a specific offering date.
Motorola will continue to own a portion of Austin, Texas-based SPS Spinco until 2005, when it will dissolve the financial relationship, according to the filing. Spinco plans to change its name in the next few months. A Motorola spokeswoman had no comment Wednesday.
The filing also details how Spinco, like many in the semiconductor sector, underwent a financially painful three years of slowing sales brought on by what the company describes as an "abrupt decline" in the demand for cell phones and other digital devices.
Spinco suffered "sizable net losses" of $2.2 billion in 2001, $1.8 billion in 2002 and another $400 million during the first nine months of 2003, according to the filing. As a result, the company cut 11,000 jobs and shuttered a dozen manufacturing facilities. "We believe that we are well positioned to improve our financial results," Spinco said in the filing.
Motorola has committed to buying most of the cell phone chips it needs through 2006 from Spinco, according to the filing. Spinco's cell chips do not use the Code Division Multiple Access standard, which is popular in North America, Latin America and Korea.
The filing comes a day after Motorola announced that former Sun Microsystems President Ed Zander will be its next chairman and chief executive officer. Elected unanimously by Motorola's board of directors, Zander will take the helm Jan. 5, replacing Christopher Galvin, whose grandfather founded the company.