Time Warner said that it will spin off its internet business, AOL, as a separate company on 9 December.
On that date, Time Warner shareholders of record as of 27 November will receive one share of AOL common stock for every 11 shares of Time Warner common stock they hold, the media company said.
AOL said in a Monday regulatory filing that it will start out with about 105.7 million common shares, based on the amount of shares of Time Warner stock it expects to be outstanding as of 27 November.
Based on Time Warner's closing stock price of $32.35 (£19.24) on Monday, AOL is currently worth about $3.4 billion (£2.02 billion).
That is a fraction of the $20 billion (£11.9 billion) that longtime advertising partner Google valued it at in 2005 when it bought a 5 per cent stake in the company for $1 billion (£594 million).
It is also much lower than what Time Warner valued AOL at in July when it bought back Google's investment for $283 million (£168 million) - this signified AOL was worth less than $5.66 billion (£3.36 billion) when excluding an unspecified cash distribution that was included in the total price.
Time Warner was initially purchased by AOL in 2001. The media conglomerate said in May that it planned to spin off the business by the end of the year after years of trying unsuccessfully to integrate the two companies.
AOL's internet access business has long been fading, while efforts to derive more revenue from online advertising have encountered difficulties.
AOL is based in New York and has major operations in Northern Virginia.
It has about 6,900 employees, though the company is expected to announce a large restructuring plan as it separates from Time Warner, which could lead to numerous job cuts.
AOL shares will start trading regularly on the New York Stock Exchange on 10 December under the ticker "AOL."
Prior to that, shareholders will be able to trade stock on a "when-issued" basis starting 24 November. In this type of trading, stock can be bought and sold but the transactions are not completed until the stock is formally issued.Reuse content