Time Warner to spin off AOL as an independent company

28 May 2009

Time Warner, the world's third largest media and entertainment company today said that it would spin off AOL as an independent, publicly traded company by the end of the year, ending eight years of an unequal marriage, when the smaller AOL acquired Time Warner for $147 billion in 2001. (See: World's largest media company is born)

Time Warner, which has been planning to spin off AOL since the past two years, said, ''After the proposed separation is complete, AOL will compete as a standalone company, focused on growing its Web brands and services.''

New-York-based AOL will also continue to operate one of the largest internet access subscription services in the US.

Time Warner chairman and CEO Jeff Bewkes said, ''We believe that a separation will be the best outcome for both Time Warner and AOL. The separation will be another critical step in the reshaping of Time Warner that we started at the beginning of last year, enabling us to focus to an even greater degree on our core content businesses.''

''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,'' he added.

Since Time Warner owns 95 per cent of AOL, and Google holds the remaining 5 per cent, Time Warner will acquire Google's 5 per cent stake in AOL in the third quarter of 2009, making Time Warner shareholders the owners of all of the outstanding interests in AOL.