Chicago cable television infrastructure king General Instrument Corp, which was taken private in a buyout a few years back before returning to market a couple of years ago, is to do some financial engineering of its own. It has decided to divide itself into three independent public companies with the aim that each should become the leader in one distinct global growth market. Expected to be completed this summer, the trisection will be achieved via a tax-free spin-off to shareholders. The result will be three independent companies, led off by NextLevel Systems Inc, a worldwide supplier of systems and components for high- performance networks delivering video, speech and Internet and data services, to comprise the cable, satellite and telephony businesses, which in 1996 had sales in excess of $1.7bn. The second will be CommScope Inc, manufacturer of coaxial cable and supplier of high-performance electronic cables, with 1996 sales of more than $560m; and the third will be General Semiconductor Inc, now the company’s Power Semiconductor division, which is styled the world’s leading supplier of low to medium-power rectifiers and transient voltage suppressors, with 1996 sales of over $360m. All this is not going to come free, and the company said it will incur after-tax charges of $55m to $65m against its figures for last quarter to cover the costs – primarily those relating to the transition to the next generation of digital products, restructuring costs incurred up to December 31, and write-down of some assets. That is by no means all – the company will incur additional after-tax charges in 1997 of $50m to $70m for costs related to the consummation of the restructuring, including the costs of dividing the Taiwan assets between NextLevel Systems and General Semiconductor.
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