Motorola is splitting its consumer-oriented side, which makes cell phone and cable 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 Tuesday, allowing new investors to buy shares.
Motorola shareholders of record on Dec. 21 will receive one share of Mobility for every eight shares of Motorola (old) they already held.
Motorola 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. The "when issued" trades will not be settled until Tuesday, when the split becomes official.
In trading Monday, shares of Mobility jumped $1.14, or nearly 4 percent, to close at $30.24, while Solutions fell 57 cents, or 1.5 percent, to $37.48.
Motorola's professional business has become the crown jewel of its portfolio, while its cell phone business is just emerging from a long slump.
The divisions that will become Motorola Mobility had $2.9 billion in sales in the most recent quarter, compared with $1.9 billion for the Motorola Solutions segments. However, the $321 million in operating earnings at Solutions was much stronger than the $3 million that Mobility made.
The company's cell phone division once enjoyed strong sales thanks to the Razr, a slim, clamshell-style feature phone that debuted in 2004 and became a best-seller. As recently as 2007, cell phones accounted for two-thirds of the company's revenue.