Vivendi Universal and General Electric Confirm Proposed Merger8 Oct, 2003 By: Erik Gruenwedel
As expected, General Electric and Vivendi Universal have confirmed last month's proposed merger deal between NBC and Vivendi Universal Entertainment (VUE).
The new media company, called NBC Universal, will have estimated assets of about $43 billion, with GE owning 80 percent, and 20 percent owned by VUE shareholders.
NBC chairman and CEO Bob Wright will head the new company.
As part of the deal, VUE shareholders will receive $3.8 billion in cash, of which $3.3 billion will go to parent and largest stakeholder Vivendi Universal. The French-based company can monetize its share in the new company beginning in 2006.
NBC Universal assumes about $1.7 billion in debt.
The merger will result in up to $500 million in unspecified cost reductions and revenue growth, according to company statements.
NBC currently distributes its home entertainment properties through a variety of third-party vendors, including Lions Gate and Artisan Home Entertainment.
Some observers expect that many of those deals could be taken over by Universal Studios Home Entertainment, whose distribution network dwarfs much of the industry.
“Everything is still being determined, and nothing has changed in the way we do our business as of right now,” said a source familiar with the network's distribution agreements. “It's business as usual.”
An NBC Enterprises spokesperson declined comment. A USHV representative was unavailable for comment.