CHICAGO (CN) – Under pressure from Carl Icahn, who owns 6 percent of its shares, Motorola said today it will break up into two companies, one of them its struggling cell phone business. Unable to exploit the popularity of its Razr phone, Motorola said it will seek a new CEO to head that division, which it hopes will be established by 2009. Shareholders will get shares in both companies, Motorola said.
Icahn sued Motorola in Delaware Chancery Court on Monday, demanding books and records before its May 5 annual shareholders meeting. Icahn threatens a shareholders revolt and wants to replace board members with his own slate.