Business Notes Alliances

Time Warner's long courtship with potential foreign partners may finally be leading to an alliance. Last week two Japanese giants, electronics maker Toshiba and the trading concern C. Itoh, confirmed that they are negotiating to make an investment in the U.S. entertainment and communications company. In the deal currently being discussed, the Japanese corporations would invest $500 million each for a 12% share of a new Time Warner subsidiary that would bring together the company's movie, cable and TV-programming businesses.

The new Time Warner entity would assume as much as $7 billion of the $8.7 billion that remains of the bank debt the corporation took on when Time Inc. and Warner Communications merged in 1990. The potential partners see other benefits as well. Toshiba could provide cable-TV hardware to Time Warner, while C. Itoh could gain distribution rights for the U.S. company's entertainment products in Japan and other countries. Negotiators said the deal could take weeks to complete. But expectations about an imminent alliance were fanned by the arrival in Japan last week of Time Warner chairman Steve Ross, who was attending the Tokyo Film Festival. Even if the Japanese alliance is formed, Time Warner says it plans to continue exploring strategic partnerships in Europe as well.