This was expected to happen, but not for several more years. The media giant is paying $16.7 billion for GE's 49 percent position, with the sale expected to be completed by the end of next month. Comcast also said it would purchase the NBC studios and offices at 30 Rockefeller Plaza in NY, along with the CNBC headquarters in New Jersey, for an additional $1.4 billion. Comcast took control of NBCUniversal in early 2011, and it had another five years to buy out GE's interest. "We didn't have to do it; GE didn't have to sell now," said Comcast CEO Brian Roberts on CNBC. "But we came to an understanding that I think works out well for everybody." Here's the NYT story.
Here's the release:
Comcast to Acquire General Electric's 49% Common Equity Ownership Interest in NBCUniversal
PHILADELPHIA--(BUSINESS WIRE)--Comcast Corporation (Nasdaq: CMCSA, CMCSK) announced today it will acquire GE's entire 49% common equity stake in the NBCUniversal joint venture for approximately $16.7 billion. Also, NBCUniversal will purchase from GE the properties used by NBCUniversal at 30 Rockefeller Plaza and CNBC's headquarters in Englewood Cliffs, NJ for approximately $1.4 billion. The acquisition accelerates GE's divestiture ahead of a redemption period that would have begun in July 2014 and solidifies Comcast's position as a leading media and technology company. The transaction is subject to customary closing conditions and is expected to close by the end of the first quarter of this year.
"This is an exciting day for Comcast as we have agreed to accelerate the purchase of NBCUniversal. The management team at GE has been a wonderful partner during the past two years and their support has been very valuable. Our decision to acquire GE's ownership is driven by our sense of optimism for the future prospects of NBCUniversal and our desire to capture future value that we hope to create for our shareholders," said Brian L. Roberts, Chairman and CEO, Comcast Corporation. "We believe the terms of the transaction are attractive and have planned for this event by taking a number of financial steps to prepare our balance sheet. We believe we are in a strong and unique position to continue to grow and build value in our combined company."
The transactions will be funded with $11.4 billion of cash on hand, $4.0 billion of subsidiary senior unsecured notes to be issued to GE, $2.0 billion of borrowings under Comcast and/or subsidiary bank credit facilities and $725 million of subsidiary preferred stock to be issued to GE.
Morgan Stanley was financial advisor to Comcast and Davis Polk & Wardwell LLP was the Company's legal advisor.
*Some backstory from Reuters:
Comcast turned its attention to NBC after a failed $54 billion hostile takeover attempt of Disney in 2004 that ultimately led to the resignation of that company's CEO, Michael Eisner, after more than 20 years on the job. The hostile offer exposed Comcast's desire to merge content with distribution at a time when most of its industry peers, such as Viacom-CBS and AOL-Time Warner, were doing the opposite. While Comcast held the title of the nation's leading cable operator by a wide margin, its status as a content player was always second tier, with middling networks like E!, G4 and Golf forming the basis of its channel portfolio. The NBC deal gave the Philadelphia-based cable operator the cable industry's top-rated entertainment network, USA, its leading business network CNBC, upstart news network MSNBC and Bravo, among others. For GE, the sale culminates a long-planned exit from the entertainment business.