Time Warner said Thursday that its board is moving ahead with plans to separate its AOL division and make it an independent, publicly traded company.
“We believe that a separation will be the best outcome for both Time Warner and AOL,” said Jeff Bewkes, Time Warner Chairman and Chief Executive Officer.
“The separation will also provide both companies with greater operational and strategic flexibility. We believe AOL will then have a better opportunity to achieve its full potential as a leading independent Internet company.”
Jeffrey L. Bewkes
Time Warner owns 95 percent of AOL, and Google holds the remaining 5 percent. As part of the spinoff Time Warner will purchase Google’s 5 percent stake in AOL in the third quarter of this year.
The AOL spinoff will be structured as tax-free to Time Warner stockholders. The transaction is contingent on the satisfaction of a number of conditions, including completion of the review process by the Securities and Exchange Commission and the final approval of transactions terms by Time Warner’s Board of Directors. Time Warner says it aims to complete the transaction around the end of the year.
“Becoming a standalone public company positions AOL to strengthen its core businesses, deliver new and innovative products and services, and enhance our strategic options,” said Tim Armstrong, AOL Chairman and Chief Executive Officer.
“We play in a very competitive landscape and will be using our new status to retain and attract top talent. Although we have a tremendous amount of work to do, we have a global brand, a committed team of people, and a passion for the future of the Web.”
