Comcast agreed today to buy a majority stake in NBC Universal from General Electric for $13.75 billion (£8.3 billion), in a complex deal that will give America’s largest cable TV operator control of a major television network, a string of cable channels and a movie studio.
The deal satisfies Comcast’s desire to own more cable content that it can push onto mobile phones and other devices.
It could also mean that film reaches TV more quickly after showing in cinemas, although critics warned that prices could rise.
If the deal clears regulatory and other hurdles, Comcast and GE would form a joint venture that is 51 per cent owned by Comcast, 49 per cent owned by GE and managed by Comcast.
The joint venture will consist of the NBC Universal (NBCU) businesses and Comcast`s cable networks, regional sports networks and certain digital properties.
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Such properties will give Comcast something like the heft of the Walt Disney Company, which Brian Roberts, the chief executive of Comcast, tried to buy.
In agreeing to buy 51 per cent of NBCU from GE, which has controlled NBC since 1986, Comcast gains control of the NBC broadcast network, the Spanish-language Telemundo and about two dozen cable channels, including USA and The Weather Channel.
It would also receive Universal Pictures and theme parks owned by the company.
Comcast has wanted to gain traction in the media content business since 2004, when it issued a $54 billion hostile bid for Disney.
Since then, investors have been weary of any possible deal with GE, concerned that Comcast would make an acquisition that it could not handle.
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Under the terms of the deal, Vivendi SA, NBCU’s minority owner, will sell its 20 per cent stake in the company to GE for $5.8 billion.
Comcast will pay GE nearly $6.5 billion and contribute $7.25 billion of cable channels it owns, including E!, Style and Golf Channel.
The deal values NBCU’s assets at $30 billion.
NBCU recorded operating earnings of $1.7 billion in the first three months of 2009, on revenue of $11.2 billion.
Since news of the deal leaked on Sept 30, shares in Comcast, which is headquartered in Philadelphia, have fallen by 11 per cent, wiping out about $5 billion in market value.
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Comcast also said Thursday that it would increase its annual dividend by 40 per cent, to 37.8 cents a share, and confirmed that it would still buy back stock.
Consumer advocates have warned that viewers may pay more for TV.
Under the deal, subscription TV operators could end up negotiating with Comcast — a direct rival — for the price of carrying NBCU’s cable channels.