Motorola IPO

Motorola Inc. will divest its holdings in companies that provide wireless service overseas, many of which have been competing with Motorola customers. Motorola, based in Schaumburg, Ill., packaged the wireless stakes into a single company called Propel Inc., which filed for a $500-million initial public offering. Propel will sell as much as 20% of its stock through the IPO, with Motorola distributing the remaining shares later. Motorola, the world’s No. 2 mobile-phone maker, originally invested in these foreign service providers to help develop markets for Motorola mobile phones and other wireless equipment. However, this has created a conflict because other customers for Motorola equipment have found themselves competing with the Propel companies. Within 12 months of the IPO’s completion, Motorola plans to either distribute the remaining Propel shares to shareholders or offer shareholders the option of exchanging Motorola stock for Propel shares. Motorola rose 44 cents to close at $30.69 on the NYSE.