Motorola today confirmed, it will acquire Symbol Technologies Inc. for about US$ 3.9
billion in a deal that expands the world's second-largest cellphone maker's
presence in the market for business-oriented mobile devices.
The deal for Symbol, which makes portable bar-code scanners and customized
(mostly Windows Mobile-based) handheld computers, is expected to close in late
2006 or early 2007, pending regulator clearance and approval by Symbol
shareholders, company officials said.
"This is a company we've been looking at for some time," Motorola
chairman and CEO Ed Zander said in a conference call from Symbol's
headquarters in Holtsville, N.Y. "We really had our hearts set on adding
lots of critical mass and critical size inside the enterprise area, and
today we do that."
Schaumburg-based Motorola said it would pay US$ 15 for each Symbol share.
That's 18 per cent higher than Symbol's closing price of US$ 12.71 on Friday,
before weekend news reports of an impending deal helped boost the stock to US$
14.67 on Monday. In Tuesday morning's trading on the New York Stock Exchange,
Symbol was up 2 cents a share at US$ 14.69 while Motorola was down 7 cents at
Symbol also produces mobile devices for rugged business
environments, as well as equipment based on the emerging wireless technology
known as RFID, or radio frequency identification, which is used for inventory
tracking and other purposes.
Motorola intends for Symbol to become the
"cornerstone" of the company's enterprise mobility business, said Symbol CEO Sal
Iannuzzi. Symbol has about 5,200 workers and in 2005 reported earnings of US$
32.3 million on sales of US$ 1.77 billion.
"This transaction is about growth," Iannuzzi said. "We are confident that
Symbol's products and personnel will prove to be a valuable asset to
Motorola and will be the cornerstone of Motorola's enterprise mobility
strategy going forward."
The deal is Motorola's largest since its US$ 17-billion acquisition of cable
TV box-maker General Instrument Corp. in 2000.
The merger won't affect
Motorola's stock repurchase program, company officials said. In July Motorola
announced it would spend US$ 1.2 billion to buy back shares ahead of schedule
and authorized a new US$ 4.5-billion repurchase plan good for the next three
years. The move allocated a sizable portion of the company's large cash reserves
to its stock.
Motorola, second in the global handset market behind Finland's
Nokia Corp., expects the acquisition to add to earnings per share in the first
year following closing, excluding certain non-cash charges.
Cheers ~ Arne