Motorola and Icahn Settlement

Do you follow the news and happenings in the mobile phone industry? If you do , then you are probably aware that Motorola has been having problems. One of the problems that have trouble the company is a heated dispute with activist investor, Carl Icahn.

Icahn has engaged Motorola in a proxy dispute and is trying to force the company to hand over documents related to its money-losing mobile devices business. The activist aims to discover if Motorola's board failed in its duties.

Recently, Motorola has announced that they have managed to reach an agreement with Icahn and the dispute between both parties are over. To settle the dispute the company has agreed to seat an ally of that investor Carl Icahn on its board. Motorola has also nominated another Icahn ally for election at the company’s annual shareholder meeting.

As part of the settlement, Icahn will also play a significant role on the selection of a CEO for Motorola's devices business. The activist investor will also play a big part The restructuring of the business into two publicly traded companies.

Carl Icahn also had to agree to Motorola's requests to complete the deal. He has to drop any current litigation against the company. He will also stop soliciting proxies and to support Motorola’s nominees with the vote of his 145 million shares.

Both parties are reportedly pleased with this development. Motorola can benefit from avoiding a costly and distracting proxy contest allowing the company to pursue its plans to restructure. Icahn was also pleased that the agreement will allow shareholder representatives to have “strong input” into the company’s future.

Things already seem to be looking up for Motorola as one of the largest consumer electronics maker in India is interested in buying the handset business. The Indian company has reportedly has retained the services of an investment bank to advise it on its bid and has began network operations. Motorola’s handset business is estimated at $3.8 billion.