General Electric and the cable giant Comcast have moved closer to a deal giving control of NBC Universal to Comcast, and a formal announcement could be made sometime next week, people briefed on the talks said Sunday.
After a series of meetings last week, the two companies reached a tentative agreement on Friday over the main points of a deal, these people said. Comcast would own about 51 percent of NBC Universal, contributing several billions of dollars in cash and its own stable of cable networks to the new venture.
CNBC-parent GE, which currently owns 80 percent of the entertainment company, would retain the other 49 percent and would contribute about $12 billion in debt to the new entity, though it is expected eventually to sell its ownership interest over several years.
Much work remains before the deal can be completed. The main issue is the negotiations with Vivendi, the French conglomerate that owns 20 percent of NBC Universal. Talks with Vivendi are continuing, focused largely on how to reach an acceptable valuation of NBC Universal, these people said. The French media company gained its stake in NBC Universal in 2004 through a deal with GE, which combined NBC with Vivendi’s Universal Entertainment.
Vivendi’s chief executive, Jean-Bernard Lévy, said at an industry conference last week that his company might seek to sell its stake in NBC Universal through an initial public offering. Under the terms of its agreement with GE, Vivendi has the right from mid-November to mid-December to sell its stake in NBC Universal. But analysts largely expect GE to reach a deal to buy Vivendi’s stake.
Talks with Vivendi may still fall apart, people familiar with the talks cautioned.
Other potential bidders have surfaced, including the News Corporation. But talks between GE and Comcast have advanced far enough that a deal with another company was unlikely, people briefed on the matter said.
Comcast and GE plan to take care of other deal matters, including presentations to credit ratings agencies like Standard & Poor’s and Moody’s Investors Service, later this week, these people said. Even if a deal is completed by next week, it would still require regulatory approval, a process that could take several months.
If a deal is completed, it would help diversify Comcast’s holdings beyond its cable television operations, a longstanding goal for its chief executive, Brian Roberts. He has been heavily involved in the talks, these people said.