The deal creates a new entity, NBC Universal, that would become the fourth-largest media conglomerate in the world, with revenues of approximately $13 billion. GE would 80% own the new company, while Vivendi retains the remaining 20%.
Vivendi shareholders will receive $3.8 billion in cash and stock from GE, which also assumes $1.6 billion in debt. Bob Wright, GE's vice chairman, will head the new company.
The addition of Vivendi's Universal television properties, which include USA Network, Sci Fi and Trio, to NBC's Bravo, Telemundo, MSNBC and CNBC is arguably the more significant merger development for advertisers. The beefy combo of cable channels should add weight when they push advertisers to support struggling brands such as MSNBC (an NBC/Microsoft joint venture) and CNBC.
"NBC Universal represents the last pairing of a major network and a major studio. It is extremely exciting for NBC and marks the beginning of a new powerhouse in the media world," said Rik Toulon, special entertainment counsel for NBC and partner with Katten Muchin Zavis Rosenman, Los Angeles, which is advising NBC on film, television, cable and other entertainment matters related to the deal.