Vivendi and General Electric sign definite agreement on new entertainment company
Wednesday, October 8th 2003, 12:00 am
By: News On 6
PARIS (AP) _ Vivendi Universal and General Electric said Wednesday they signed the definitive agreement to merge the French company's U.S. entertainment assets with GE's NBC to form a new company, NBC Universal.
As announced in early September when the companies said they would enter exclusive negotiations, NBC will own 80 percent of the new entity, with the remaining 20 percent controlled by Vivendi.
The new company will have an estimated value of $43 billion, Vivendi said in a statement.
NBC Universal will join Hollywood studio Universal Pictures, TV production unit Universal Television, Universal theme parks, Spanish-language television network Telemundo and NBC's network and production unit in a new entertainment giant with annual revenue of $13 billion.
Vivendi Universal Entertainment shareholders will receive $3.8 billion at the closing of the deal, expected during the first half of 2004.
Vivendi, an 86 percent shareholder of the entertainment group, will then get $3.3 billion _ which will enhance chairman Jean-Rene Fourtou's debt-reduction program.
Although sources close to the company had hinted in recent days that the cash component of the deal had been sweetened by General Electric, the figures were the same as those announced in September.
NBC will take on $1.7 billion of Vivendi's debt, slightly above the $1.6 billion initially announced in September.
In a statement, Fourtou said the merger would allow Vivendi to reduce debt to $5 billion by the end of 2004.
Vivendi, which started out as a French water and utilities conglomerate, expanded into the media business under former chairman Jean-Marie Messier.
But Messier's acquisition program nearly bankrupted the company, and Fourtou is reversing several of the forays Messier made, including his entree into Hollywood.