Comcast to Pay $13.75B for NBC

Comcast Corporation (CMCSA) is expected to pay $13.75 billion in cash and assets to gain control of NBC Universal from General Electric Company (GE).

The new NBC Universal also is expected to borrow $9.1 billion, part of which will be used to cover the $5.8 billion that GE is paying for Vivendi SA's 20% stake in NBC Universal. That company includes the flagship NBC TV network, the Telemundo Spanish-language network, Universal Pictures and theme parks, and about two dozen cable channels such as Bravo and CNBC.

GE has the option to sell half of its 49% stake in the new NBC Universal three and a half years after the deal closes. It may sell the other half after seven years.

This week, GE convinced Vivendi to sell its stake in NBC Universal, and paved the way for Comcast to buy the entertainment company.

Comcast is pursuing the transaction because of its desire to control both content and distribution, a strategy that hasn't been successful in the media industry. If the deal gets approved by regulators, Comcast would oversee assets with revenue of $51 billion in 2008, more than Time Warner Inc (TWX), Walt Disney Company (DIS) or News Corporation (NWS).

General Electric Company operates as a technology, media, and financial services company worldwide. GE’s NBC Universal segment engages in the production and distribution of films and television programs, operation of television stations and cable/satellite television networks, as well as theme parks.

We currently have a Neutral recommendation on General Electric.

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