Time Warner Inc. (NYSE: TWX) announced that it would spin-off its majority stake in Time Warner Cable Inc. (NYSE: TWC) in a $9.25 billion deal. The widely anticipated transaction comes as Time Warner is attempting to lean down to improve its efficiency and focus on its core businesses. Meanwhile, a separate cable entity may very well attract potential investors or even suitors in the near future.

The deal will involve Time Warner exchanging its 12.4 percent interest in TW NY Cable Holdings Inc., a Time Warner Cable subsidiary, for 80 million newly issued shares of Time Warner Cable's Class A stock. This will increase its ownership to 85.2% from 84%. Time Warner Cable will then issue a $10.9 billion dividend to shareholders, of which Time Warner will receive $9.25 billion.

"After the transaction, each company will have greater strategic, financial and operational flexibility and will be better positioned to compete," says Jeff Bewkes, chief executive of Time Warner. "Separating the two companies will help their management teams focus on realizing the full potential of the respective businesses and will provide investors with greater choice in how they own this portfolio of assets."

The widely anticipated transaction is slated to close in the fourth quarter.

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