Media giant Time Warner (NYSE:TWX), created by the 1990 merger of Time Inc. and Warner Communications, is about to undergo a major change.
On Wednesday, the company announced that its iconic magazine publishing unit, Time Inc., will become a separate company again by year’s end. The magazine unit, whose roster of titles includes Sports Illustrated, People and Time, is estimated to be worth about $2.5 billion, the Associated Press notes.
Investors liked the news, sending Time Warner shares up more than 2% in Thursday morning trading.
Spinning off the magazine business will allow Time Warner to concentrate on its television and film businesses, company officials said.
Time Warner has previously spun off its cable television operation, Time Warner Cable (NYSE:TWC), and AOL (NYSE:AOL), the Internet pioneer with which it disastrously merged in 2000.
Plans to spin-off the magazine unit comes after negotiations with Meredith (NYSE:MDP) to form a lifestyle magazine joint venture collapsed.
Revenues at the magazine unit have fallen sharply in recent years. Earlier this year, the unit announced hundreds of layoffs.