Time Warner Inc and AOL Inc. have announced 9 December, 2009 to be the date to officially spin-off the latter from Time Warner.

The Board of Directors of Time Warner has approved the final distribution ratio and declared a pro rata dividend of the shares of AOL common stock owned by Time Warner that will result in the complete legal and structural separation of the two companies, informs the companies in press statement.

With this approval, stockholder of Time Warner, as on 27 November, will receive one share of AOL common stock for every 11 shares of the Time Warner common stock they possess. Further, the fractional shares of AOL common stock will not be distributed to the Time Warner shareholders.

Elaborating on the structure being adopted by Time Warner to hive off AOL, the release states, “The AOL spin-off has been structured to qualify as a tax-free dividend to Time Warner stockholders for U.S. federal income tax purposes. Cash received in lieu of fractional shares, however, will be taxable.”

AOL common stock will begin trading on a "when-issued" basis on the NYSE under the symbol "AOL WI" beginning on November 24, 2009 until December 9, 2009.

Time Warner acquired AOL, the internet firm in 2000. The companies announced their plans to de-merge the ventures after unsuccessful attempts to integrate the two businesses. AOL was valued at $163 billion in 2000 sliding down to the current value of around $3.5 billion. The integration of the two companies is considered to be one of the most catastrophic mergers in the history.

Time Warner, a global leader in media and entertainment with businesses in television networks, filmed entertainment, publishing and interactive services, owns media brands such as CNN, HBO and Warner Bros. It spun off its cable distribution unit, Time Warner Cable Inc. last year as the company focuses to be a content company.