Vivendi, GE deal is boost for Comcast
The cable giant's plan to acquire NBC Universal could be done in days, a source said, with GE's pact to buy the remaining stake in NBC U.
Vivendi SA, a French media conglomerate, and General Electric have reached a tentative agreement for Vivendi to sell its 20 percent share in NBC Universal Inc. back to GE, which would pave the way for Comcast Corp. to gain control of the giant entertainment programmer.
A deal could be completed for Comcast, the Philadelphia cable giant, to obtain a controlling interest in NBC Universal within days, a person knowledgeable of the talks said late last night.
GE chief executive Jeff Immelt met with top Vivendi officials last week to finish talks between the two companies over the fate of NBC Universal. GE is eager to divest NBC Universal in a joint venture to Comcast because of its own financial problems. But it had to reach an agreement with Vivendi, a French company, over the 20 percent stake in the company before a deal with Comcast could proceed. GE owns the other 80 percent of NBC Universal. Most viewed Vivendi's delay in reaching a deal with GE as hardball negotiating tactics and an attempt to squeeze more money out of GE.
Comcast had no comment late last night.
GE reportedly will pay Vivendi $5.8 billion for its stake in NBC Universal, which values the entire NBC Universal enterprise at about $29 billion, the New York Times reported last night. Comcast is expected to pay about $6 billion in cash and contribute programming assets to NBC Universal for a 51 percent stake in NBC Universal.
During the next seven or eight years, Comcast is expected to purchase the remaining ownership of NBC Universal - or the other 49 percent - from General Electric. Comcast says it will use the cash flow from the NBC Universal to purchase the remaining ownership, as well as pay off debt on NBC Universal. But Comcast has said it would guarantee that it would have the money for the other 49 percent through a "back-stop" fund.
Comcast chief executive Brian Roberts has repeatedly expressed an interest in controlling a big entertainment programmer and previously made an unsolicited bid for the Walt Disney Co., which failed.
Comcast wants NBC Universal largely for its lucrative cable channels. NBC Universal spans the NBC and Telemundo broadcast networks; cable channels such as Bravo and CNBC; the Universal Pictures movie studio; and Universal theme parks.
Comcast would contribute cable networks such as E! and Style to a new NBC Universal joint venture with Fairfield, Conn.-based GE.