General Electric* agreed to buy the 20 percent stake in NBC Universal from partner Vivendi for $5.8 billion. The long-awaited GE-Vivendi deal will pave the way for GE to sell 51 percent of NBCU to Comcast. Mike Holland, chairman of Holland & Company, shared his insights on the deal.
“On the surface of it and based on market reaction, it looks like there are no losers in this deal…The stocks of both GE and Vivendi went up on the announcement,” Holland told CNBC.
“Vivendi is a very tough negotiator, so it was crucial for Immelt to show up in Paris to get this deal structured in a way where he didn’t have to be viewed by the marketplace as giving up a ridiculous amount of money to get this deal done.”
Holland said the deal will benefit both GE and Comcast .
“GE is a cleaner, better business without [NBCU], and [Comcast CEO Brian] Roberts can make something out of this,” he said.
“I don’t think the GE multiple goes down…It helps Immelt address some of the financials and use some of the proceeds over the next several years to make the financial side of the business less onerous in the next downturn—that’s always been the problem with GE stock.”
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* General Electric is currently the parent company of CNBC.
Holland owns shares of GE and Comcast.