Time Warner to split content, distribution businesses
Time Warner plans to split the company's media content and distribution businesses through a "spin-off" of Time Warner Cable by the end of March.business Updated: Feb 20, 2009 12:03 IST
Time Warner plans to split the company's media content and distribution businesses through a "spin-off" of Time Warner Cable by the end of March.
The process will involve a pro-rata dividend of all Time Warner Cable stock held by Time Warner, the companies announced on Thursday, but did not say how this would be done.
The US Federal Communications Commission this month approved the proposed spin-off of Time Warner Cable, a subsidiary of Time Warner, which also owns CNNMoney.com, with no major conditions, clearing the last major hurdle to the deal announced last year.
The plan will break up a two-decade marriage of traditional distribution and content, a strategic combination of assets that has fallen out of favour on Wall Street as big media corporations compete with faster moving Internet companies.
The once top media company has been under pressure to streamline its focus as a pure media content company with the Warner Bros movie studios, Time Inc. magazines and Turner cable networks and stem a stock-price decline.
Time Warner Inc and its cable division consider that the capital structure requirements for cable operators are different from a more diverse portfolio of assets, making quick decisions difficult.
Under a previously announced, detailed plan, Time Warner had intended to completely split from the cable arm by the end of 2008, in return for a $9.25 billion payout in one time dividends.