Comcast announced on Tuesday that the multimedia corporation will buy out the totality of General Electric's 49 percent common equity stake in the NBCUniversal joint venture for an estimated $16.7 billion. In addition, Comcast purchased NBCUniversal-run assets in its New York (30 Rockefeller Plaza) and New Jersey (Englewood Cliffs) locations for $1.4 billion.
These combined actions have led to Comcast's full ownership of NBCUniversal and calcifies its position as the leading media and technology company, as suggested by its press release. Comcast is confident that these transactions - subject to traditional closing conditions - will close by the end of this year's first quarter.
"The transactions will be funded with $11.4 billion of cash on hand, $4.0 billion of subsidiary senior unsecured notes to be issued to GE, $2.0 billion of borrowings under Comcast and/or subsidiary bank credit facilities and $725 million of subsidiary preferred stock to be issued to GE," said Comcast.
In Jan. 2011, Comcast assumed control of 51 percent of NBCUniversal, leaving the rest with GE. Originally, Comcast planned to start acquiring a larger title to NBCUniversal over a seven-year period, starting by way of its operating cash in July 2014.
Thanks to Comcast's unexpected glut of cash flow from last July's sale of the A&E network, along with further prosperity the company saw in recent months, the NBCUniversal buyout was expedited. Concurrently, CEO Brian Roberts told The Associated Press, the rising market value of media conglomerates led to a "good deal" for Comcast.
"We believe the terms of the transaction are attractive and have planned for this event by taking a number of financial steps to prepare our balance sheet," said Roberts. "We believe we are in a strong and unique position to continue to grow and build value in our combined company."
Noting that Comcast had long intended to take on full ownership of NBCUniversal, Roberts revealed that the company had initially "wanted to learn the business" before doing so, but that in the end, "We feel that now is the opportune time."
The provenance of NBC, the first major broadcasting network in the U.S., stems from its 1926 creation as a radio network by the Radio Corporation of America (RCA). RCA, in turn, was co-founded by GE in 1919. In 1932, RCA took full ownership of NBC, with GE buying it back in 1986 in order to offset nascent competition from overseas manufacturers.
Tuesday's sale of its NBCUniversal holdings to Comcast now allows GE to focus its investments more in ventures such as medical imagine equipment, airplane engines, and electrical generations, which it sees as "theoretically more profitable" than its erstwhile "glamorous" media holdings, according to NPR.
With almost two-thirds of its company's revenue coming from cable TV, Internet, and telephony services, Comcast will now see the other third of said revenue fostered by NBCUniversal - whose umbrella shelters: NBC, Telemundo, USA, CNBC, Bravo, and SyFy, as well as its Universal Pictures movie studio and Florida/California theme parks.
"This is an exciting day for Comcast as we have agreed to accelerate the purchase of NBCUniversal," said Roberts.
"The management team at GE has been a wonderful partner during the past two years and their support has been very valuable.
"Our decision to acquire GE's ownership is driven by our sense of optimism for the future prospects of NBCUniversal and our desire to capture future value that we hope to create for our shareholders."