New York - Time Warner (NYSE: TWX) said on Wednesday that it will officially separate itself from its Time Warner Cable (NYSE: TWC) unit in a deal that will result in a $9.25 billion windfall for the New York-based media giant. Jeff Bewkes, the president and CEO of Time Warner, said that the move will leave his company with a portfolio of businesses "focused on creating and distributing our branded content across traditional and digital platforms," as well as increased flexibility in its capital structure.

"Separating the two companies also will help their management teams focus on realizing the full potential of the respective businesses and will provide investors with greater choice in how they own this portfolio of assets," said Bewkes.

For Time Warner Cable, which is the nation's second-largest cable provider after Comcast with 13.3 million subscribers, the deal will mean greater strategic and financial flexibility, as well as a simplified capital structure.

Under the deal, expected to close by the end of this year, Time Warner Cable will declare a one-time dividend of $10.27 a share, giving Time Warner -- which owns 85% of the company's stock -- a payout of $9.25 billion.

Time Warner Cable plans to fund the dividend through its existing revolving credit facility, as well as $9 billion from a new two-year bridge loan.

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