AOL, Comcast Restructure Venture

AOL Time Warner Inc. formally unwound a complicated partnership with Comcast Corp., paying $3.6 billion in cash and stock for Comcast’s stake in Time Warner Entertainment, a joint venture that controls AOL’s cable systems and entertainment assets, including Warner Bros. and HBO.

The deal, announced last August, clears the way for AOL to spin off its cable systems in an initial public offering this summer. AOL Chief Executive Richard Parsons is counting on the cable IPO, which could raise as much as $4 billion, to help the New York-based media giant shed more of its troublesome debt.

Under the terms of the deal, Comcast received $2.1 billion cash, $1.5 billion in stock and a 21% stake in the new cable company. Comcast inherited the Time Warner Entertainment investment when it acquired AT&T; Broadband, AT&T; Corp.’s cable TV business. Federal regulators ordered the Philadelphia-based cable company to sell the interest as a condition to last year’s AT&T-Comcast; merger.