Comcast has agreed to buy a majority stake in NBC Universal for $13.75 billion, instantly creating a new kind of Hollywood giant by combining the nation's largest cable distribution network with a preeminent entertainment company, both companies announced early Thursday.
NBC Universal was valued at $30 billion in the deal.
Comcast agreed to pay GE $6.5 billion in cash and contribute businesses valued at $7.25 billion, including E!, Versus and the Golf Channel, its 10 regional sports networks and certain digital media properties.Other key points of the deal:
* Deal creates new entity, Comcast Entertainment Group.
* NBCU CEO Jeff Zucker will be CEO of the new entity.
* Comcast takes three board members, GE two.
* Vivendi sells its 20% stake for $5.8 billion.
* NBCU will take on $9.1 billion in debt.
(Read full press release)
(Pictured: Comcast COO Steve Burke, left,; founder and chairman emeritus Ralph Roberts; and CEO Brian Roberts)
After a quarter-century of uneven stewardship, General Electric unhooks a 51 percent stake of its troubled entertainment division to the nation's largest cable provider for the amount in cash and stock. GE will retain 49 percent. Vivendi has sold its 20 percent stake in NBCU as well.
In a subsequent conference call with investors, Roberts said Comcast is "full of ideas" about what direction it will go with NBC, but that it will have plenty of time -- given the regulatory hurdles the proposed merger needs to clear before it finally closes -- to figure that out.
"There's more upside than downside," Roberts said. "We're pretty excited about the whole portfolio."
The deal will require approval by federal regulators, a process that is expected to take up to a year.
The acquisition is the largest to roil the unstable media landscape in several years. It instantly gives dominant status to Comcast, which suddenly finds itself with a broadcast network, a major but ailing studio and a healthy stable of profitable cable channels.
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Comcast stock was up more than 6 percent. GE, at $16.27 per share, was up about 1 percent.The new array of united cable channels may be particularly compelling. One umbrella now will encompass all the MSNBC and CNBC channels; the Comcast-owned E! Entertainment Television and Style; and the NBCU-owned Bravo, USA Network and Syfy Channel.
TheWrap first broke the news of negotiations to purchase the division on Sept. 30.
For Comcast, the deal was a long-awaited opportunity to expand into the content space. The cable giant had previously tried, unsuccessfully, to acquire the Walt Disney Co. in 2004.
“This deal is a perfect fit for Comcast and will allow us to become a leader in the development and distribution of multiplatform ‘anytime, anywhere’ media that American consumers are demanding," said Comcast Chairman and Chief Executive Officer Brian Roberts in a prepared statement.
