Motorola finally confirmed that it will indeed split its businesses into two separate entities, a move which was seen as the obvious option in the company’s bid to revive its financial performance.

In the new set-up existing Co-CEO, Sanjay Jha will head the handsets and set-top boxes business units which will come under a new entity. The new entity will be spun off as a separate publicly traded company.

Greg Brown CEO of Motorola will head the existing entity comprising of business units wireless networking business and its enterprise radio systems operations businesses.

The split will be through a tax-free stock distribution to shareholders. The handsets and set-top boxes business will own the Motorola brand and will license it royalty-free to the enterprise and networking company.

The enterprise and networks business would assume Motorola’s debt valued at $ 3 billion.

The top management says that both the entities have the ability to obtain additional financing from the capital markets if needed.

Financial analysts had expected this move and it was only a question of when the company will split into two. The reason was that the struggling handsets business was turning out to be a dampener for the company’s overall financial performance.