-By Georg Szalai, The Hollywood Reporter

NEW YORK Time Warner has taken another step toward becoming a content-focused company.

The boards of Time Warner and Time Warner Cable have agreed to a full separation, with TW set to receive $9.25 billion of a one-time dividend to shareholders in the process.

The two have discussed the details of a separation for months, with both management teams saying TWC is doing well, but has different capital and strategic needs.

"After the transaction, each company will have greater strategic, financial and operational flexibility and will be better positioned to compete," TW president and CEO Jeffrey Bewkes said Wednesday. "Separating the two companies also will help their management teams focus on realizing the full potential of the respective businesses."

Bewkes also once again emphasized: "We're bullish on Time Warner Cable's prospects, but its strategic goals and capital needs are increasingly different from those of our other businesses."

The transaction is expected to close in the fourth quarter and include several steps.

First, TW will exchange its 12.4 percent stake in TWC subsidiary TW NY Cable Holding for 80 million newly issued shares of TWC stock, boosting TW's stake in TWC from 84 percent to 85.2 percent.

Then, TWC will declare a $10.9 billion one-time dividend to all of its stockholders that will be paid out just prior to completion of the deal.

Then TWC's dual stock structure, which has Class A and B shares, will be ended, and finally TW will distribute its entire stake in TWC to stockholders in a tax-efficient manner.