In an announcement, Symantec disclosed that the company has decided to split into two individual publicly traded companies. Michael A. Brown, chief executive of Symantec, said that the split will allow both companies to react to changing market conditions faster, gaining a competitive edge on their larger competitors. The split will be tax-free to shareholders. The company currently has a market value of more than $16 billion.
One of the new companies will focus on computer security, a field in which Symantec is very well known. The security company will provide products and services to governments, companies and individuals. In the last fiscal year, Symantec’s computer security division posted $4.2 billion in revenue.
The other company will focus on information management and associated services. The information management company will primarily focus on creating backup software. Last year, the information management division posted revenue of $2.5 billion. Symantec expects both businesses to continue growing quickly after the split.
Symantec is one of several technology companies that have recently announced plans to split into separate companies. Last month, EBay announced that it would be spinning off PayPal into its own company. Hewlett-Packard has also announced plans to divide into two separate companies with one company focusing on business services and the other focusing on personal computing.
Data storage company EMC is currently under pressure from the activist hedge fund Elliott Management to break apart and says that it is in talks with the hedge fund. While activist investors also seemed to be behind the splits at EBay and HP, the same does not seem to be true for Symantec. Mr. Brown said no activist was exerting pressure behind the scenes.
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