GE in Talks to Spin Off NBC, Give Comcast 51% of New Unit - Media * US * News * Story

Runway Angels
The superbowl of fashion shows, models walk down the runway at the 2009 Victoria's Secret Fashion Show.
The Richest Members of the US Congress
Recently, the Center for Responsive Politics found that there are 237 millionaires in the US Congress.
10 Tips to Get Out of Debt
Renowned financial author Gail Vaz-Oxlade takes a tough-love approach to helping couples in a financial crisis to face reality.

FEATURED QUIZZES

How Much Do You Know About Green?
Green has become part of our everyday lives. Green is everywhere-- energy, clothing, food, housing, transportation. It's a big business and a global business.
The Billionaire BFF's
Philanthropists. Bridge partners. Hockey players. Which responses are based on facts from Buffett's and Gates' real lives?
The Many Myths of Coca-Cola
Can you tell which statements are true, and which ones are just rumors?

SPECIAL REPORTS

Winterizing Your Portfolio
If 2009 was the winter of our discontent, will 2010 be a winter wonderland for investors? A lot depends on the recovery—or lack thereof.
Investor's Guide to Real Estate
Some even say the long-awaited recovery is here. Regardless, buyers and sellers alike can profit from our guide.
Alternative Investing
Stocks and bonds? Sure. But it's a big world out there for investors.

CNBC ON DIGG

GE Is in Talks to Spin Off NBC, Give Comcast 51% of New Unit

Published: Thursday, 1 Oct 2009 | 2:21 PM ET

Text Size

By: David Faber
CNBC Anchor and Reporter

General Electric [GE Loading... () ] and Comcast [CMCSA Loading... () ] are in talks about a deal in which GE would spin off its NBC Universal unit into a new company that would be merged with the content assets of Comcast, according to people familiar with the negotiations.

NBC
Bethany L King
NBC

The deal under consideration would allow Comcast to take 51% economic control of NBC Universal through its contributions of content assets such as the "E" channel, the Golf Channel and a group of regional sports networks and the contribution of as much as $7 billion in cash to the new company.

The prospective deal is complex and is far from a certainty. Under the scenario being contemplated, GE would spin off NBC Universal, along with a significant amount of debt, into a new company.

Comcast would merge content assets that it values at as much as $6 billion, along with cash, so that it would take a 51% ownership stake.

David Faber
CNBC Anchor and Reporter

GE would control 49% and—as part of the spin off of NBC Universal—would be able to contribute as much as $12 billion in debt to the spun off entity, say people familiar with the negotiations.

Bankers on both sides of this deal say nothing is imminent and—given the high degree of difficulty in making this work—they are far from certain a deal will get done.

Still, the willingness of GE to consider shedding NBC Universal, which includes CNBC and CNBC.com, is of great significance. GE and Comcast officials declined comment.

Under the scenario being contemplated, Comcast would not issue equity or endanger its investment-grade credit rating.

These talks have been prompted by the prospect that Vivendi of France will soon tell GE it plans to exit its 20% stake in NBC Universal.

Under the plan being discussed between GE and Comcast, GE would buy Vivendi's stake and put the borrowings that fund that purchase on NBC Universal's balance sheet. It would then add further debt to NBC Universal and spin it off.

Assuming the company was valued at $35 billion, and subtracting $12 billion in debt, Comcast would need to contribute equity valued roughly at $13 billion to garner a 51% stake.

Over time, Comcast would likely increase its ownership stake in the new company and could fund those purchases through the cash flow it receives from the company itself. Comcast's CEO Brian Roberts has long coveted control.