Williams Communications (NYSE: WCG) said late Thursday its board has authorized a tax-free spinoff of its communications business to Williams' (NYSE: WMB) shareholders.
Shares in the fiber-optic and enterprise network communications company closed up 0.19 to 15.88 Thursday.
"Assuming market conditions and other factors continue to support (the) action," the company said its board would vote during the first part of next year to set a record date, the ratio of a share of Williams Communications stock that will be issued for each share of Williams stock and to direct the distribution of WCG shares.
Once the spinoff is completed, Williams Communications, currently about 85 percent owned by Williams, would become an independent, publicly traded company.
Williams Communications has signed new contracts worth an estimated $3 billion in revenue, doubled its network customer base, met increased demands from established customers to carry their voice, data, video and Internet traffic in its third quarter report.
The company said its energy and communications businesses will have the most effective and efficient access to capital once it is spun-off, which will help fuel growth.