Motorola Keen Enough to Buy Symbol Technologies

In a press conference held at New York on Tuesday, Motorola Inc. declared to acquire the 30 years old, Symbol Technologies Inc. for about $3.9 billion in a deal that expands the world's second-largest cell phone maker's presence in the market for business-oriented mobile devices.

The acquisition by Motorola would mark the mobile phone company's largest deal since it bought General Instrument, a cable TV set-top box maker, for $17bn in 2000, and the biggest by far since Ed Zander, Motorola's chief executive, took over in 2004.

"This is a company we've been looking at for some time," Motorola Chairman and Chief Executive Ed Zander said in the 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 $15 per Symbol share. That's 18 percent higher than Symbol's closing price of $12.71 on Friday, before weekend news reports of an impending deal helped boost the stock to $14.67 on Monday.

In Tuesday morning's trading on the New York Stock Exchange, Symbol was up 2 cents a share at $14.69 while Motorola was down 7 cents at $24.88, which indicates its shareholders would tolerate a deal but were not wildly excited particularly.

Though Motorola said the acquisition of Symbol, which will keep its Holtsville, New York, headquarters, would not affect the pace of Motorola's share repurchase activity.

Motorola intends for Symbol to become the "cornerstone" of the company's enterprise mobility business, said Symbol president and CEO Sal Iannuzzi. Symbol has about 5,200 workers, and in 2005 reported earnings of $32.3 million on sales of $1.77 billion.

Founded in 1975, Symbol has for over 30 years led the way in providing full-service, integrated enterprise mobility solutions.

It is the leading maker of handheld bar-code scanners, with almost 30 per cent of the market, and RFID tag readers, with 41 per cent of the market.

The main attraction for Motorola is the RFID (radio frequency identification) technology where RFID hardware provider Symbol has something as fabulous as RD5000, its first RFID interrogator designed for mounting onto a forklift or similar vehicle. The device is compliant only with the EPC Gen 2 tag protocol and can communicate with other devices via 802.11b Wi-Fi and Bluetooth technology.

Symbol today is of course a different story, than what it had been three years ago. Three year ago Symbol Technologies was the leading company in barcode scanning when it was shaken by accounting scandals and a big drop in its stock price.

This dropped the share prices to a reasonably low order mainly due to ignoring technological issues.

Symbol's current chief executive, Sal Iannuzzi, joined the company as non-executive chairman in 2003 and was named president and chief executive in January this year having served in an interim capacity.
Last month the company reported normalised second-quarter net income of $29.9m.

On the other hand, the mobile phone giant Motorola was originally founded as the Galvin Manufacturing Corporation in 1928, after which it has come a long way since introducing its first product, the battery eliminator.

The leader in embedded processor production, Motorola has developed a broad array of microprocessors for a wide range of products. In personal communications, Motorola changed the way the world communicates, from the introduction of the DynaTAC cell phone in 1983 to today’s sleek handsets and innovative technology for mobile telephone service.

It is also a key supplier of integrated systems for automobiles, portable electronic devices and industrial equipment.

And its one of the major companies which features a constant economic growth curve.