Time Warner Buys Back AOL Stake From Google
Time Warner Inc announced on Tuesday it has bought a 5 percent stake in AOL back from Google Inc. for $283 million.
The stake purchased by from Google values AOL by about $5.7 billion. Google purchased the 5 percent stake in 2005 when the two companies announced a five-year advertising deal.
The announcement comes one day after Time Warner told the Securities Exchange Commission (SEC) that it planned to spin off AOL, which became part of Time Warner in 2001.
At the time of the merger, AOL was estimated to be worth more than $150 billion, but its value has since decreased.
The spinoff would allow AOL to become a separate entity from Time Warner, thus making it an independent publicly traded company.
Time Warner said the AOL spinoff would occur by the end of the year, according to AFP.
According to Reuters, shareholders of Time Warner will become holders of the independent AOL shares once the spinoff is completed.
Last week, AOL Chief Executive Tim Armstrong reported that the company hopes to restructure in order to become more heavily based in Web advertisement, Reuters said.
The company has already spent $58.3 million in a restructuring effort, which involved layoffs during the first quarter of this year.
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