Time Warner will separate its publishing arm, Time Inc., in a move that ends an oft-awkward and historic partnership between the two companies. Time Warner hopes to complete the transaction by the end of the year, according to a press release from the company, and will make Time Inc. a publicly traded company.
The news comes the same day that the New York Times reported talks between Time Inc. and rival magazine company Meredith to sell some of Time Inc.'s women and fashion-friendly titles failed.
Time Inc. CEO Laura Lang will also step down after a successor is named, though she will stay on through the spin-off process, the company said.
"After a thorough review of options, we believe that a separation will better position both Time Warner and Time Inc.," CEO Jeff Bewkes said in a statement. "A complete spin-off of Time Inc. provides strategic clarity for Time Warner Inc., enabling us to focus entirely on our television networks and film and TV production businesses, and improves our growth profile. Time Inc. will also benefit from the flexibility and focus of being a stand-alone public company and will now be able to attract a more natural stockholder base. As we saw with the prior spin-offs of Time Warner Cable and AOL, we expect the separation will create additional value for our stockholders."
In a memo to the staff (posted on Newsweek's Tumblr), Lang acknowledged the news would take a bit to digest.
"While there are many questions that can only be answered in time, one thing is already clear: the hard work we have done over the past year in maintaining our core business while at the same time becoming more digitally focused has positioned the company well," she wrote. "Time Inc. has incredible talent and great brands that will continue to lead our industry."
With the news, Time Warner joins News Corp. as a company to spin off its publishing division away from its entertainment arm.