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Thread: GE, Comcast confirm NBC details

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    Arrow GE, Comcast confirm NBC details

    GE, Comcast confirm NBC details


    General Electric has agreed to purchase Vivendi’s 20% stake in NBC Universal for $5.8 bn, confirming its widely trailed intentions, and clearing the decks for the sale of a controlling share in the US network to the cablenet Comcast.

    The sale places a value on NBC Universal of some $30 billion. NBCU will now borrow $9.1 billion that will be distributed to GE. Comcast will contribute programming and other elements worth $7.25 billion to create a company that combines broadcast and multichannel television and the Universal film studio.

    In addition to its cable interests, Comcast’s programming business includes E! Entertainment and Style Network, both of which have European distribution. They will combine with Universal Networks properties that include Universal Channel, 13th Street Universal, Syfy Universal (the former Sci Fi), Diva Universal and Studio Universal.

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    Arrow Comcast, GE seal deal

    Comcast, GE seal deal

    In a move that they say will lead the next phase of media industry’s evolution, cable giant Comcast and General Electric have signed a definitive agreement to form a joint venture that will be 51 per cent owned by Comcast, 49 per cent owned by GE and managed by Comcast.

    The pair say the joint venture, which will consist of the NBC Universal (NBCU) businesses and Comcast’s cable networks, regional sports networks and certain digital properties and certain unconsolidated investments, will be well positioned to compete in an increasingly dynamic and competitive media and digital environment.

    Under the terms of the transaction, GE will contribute to the joint venture NBCU’s businesses valued at $30 billion, including its cable networks, filmed entertainment, televised entertainment, theme parks, and unconsolidated investments, subject to $9.1 billion in debt to third party lenders. Comcast will contribute its cable networks including E!, Versus and the Golf Channel, its ten regional sports networks, and certain digital media properties, collectively valued at $7.25 billion, and make a payment to GE of approximately $6.5 billion of cash subject to certain adjustments based on various events between signing and closing.

    The deal also involves the previously-announced step of GE acquiring Vivendi's 20 per cent interest in NBCU for $5.8 billion. GE will purchase approximately 38 per cent of Vivendi’s interest (or approximately 7.66 per cent of all outstanding NBCU shares) from Vivendi for $2 billion in September 2010, if the Comcast transaction is not closed by then. GE will acquire the remaining 62 per cent of Vivendi’s interest (or approximately 12.34 per cent of all outstanding NBCU shares) for $3.8 billion when the transaction closes.

    Comcast Chairman and Chief Executive Officer Brian Roberts said the deal was a perfect fit for Comcast and would allow it to become a leader in the development and distribution of multiplatform ‘anytime, anywhere’ media that American consumers are demanding. "In particular, NBCU’s fast-growing, highly profitable cable networks are a great complement to our industry-leading distribution business," he added, suggesting that the deal would increase its capabilities in content and cable networks, amnd also enhance consumer choice and accelerate the development of new digital products and services.

    GE Chairman and CEO Jeff Immelt said that the combination of Comcast’s cable and regional sports networks and digital media properties and NBCU would deliver strong returns for GE shareholders and business partners. "I believe that the new NBCU will deliver value for both Comcast and GE in the future. We will give consumers and advertisers more choice and our cable and digital assets will be second to none," he said.

    Comcast also announced the creation of Comcast Entertainment Group (CEG), which will house Comcast’s interest in the joint venture and will stand alongside Comcast Cable, which operates the company’s traditional cable business. Jeff Zucker, current president and CEO of NBCU, will be CEO of the new joint venture and will report to Comcast Chief Operating Officer Steve Burke. Zucker said that consumers of all of NBCU products - on screens large and small - would have the benefit of enhanced content and experiences, delivered to them in new and better ways as a result of the deal.

    The deal is bound to face plenty of opposition in Washington, including from Free Press, Consumer Federation of America, unions worried about job losses, and from potential competitors, including smaller and mid-sized cable operators concerned about the competitive position.

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