GE-Comcast deal expected today
03 Dec 2009
A deal between General Electric Company (GE), the world's largest power equipment maker and the majority stakeholder in media giant NBC Universal Inc (NBC), and Comcast Corporation (Comcast), the largest cable-TV operator in the US, for the merger of Comcast and NBC is expected today.
The deal became possible following last week's talks between GE chief executive officer Jeffrey Immelt and his counterpart Jean-Bernard Levy of French media conglomerate Vivendi, the minority shareholder of NBC. GE owns 80 per cent stake in NBC while Vivendi holds the remainig 20 per cent. (See: GE-Vivendi progress on NBC stake sale).
GE agreed to pay Vivendi approximately $5.8 billion for its stake in NBC in order to proceed further with its planned tie-up with Comcast, although formal announcement is yet to come.
On acquiring full ownership of NBC, GE intends to sell a controlling 51 per cent interest to Comcast for approximately $6 billion to create a joint venture company. GE would retain the remaining 49 per cent stake.
The transaction would give the country's largest cable operator control over content for about 20 per cent of TV viewers. It is believed that the companies would preserve local news coverage and provide access to competitors on the content, like in previous media mergers.
Some analysts term the deal ''absolutely a blockbuster deal'' valuing NBC at around $30 billion.
It is expected that Comcast would control the company's day-to-day operations and would have the right to buy the stake it doesn't own in NBC, within the next seven years.
