From the Yahoo! wires this morning:
Vivendi, GE agree to form new media empire
Wed Oct 8, 8:17 AM ET
PARIS (AFP) - French media and communications group Vivendi Universal and US conglomerate General Electric said they had agreed to merge their US entertainment assets marking the beginnings of a huge new US media group.
The new company, which will combine GE's NBC broadcasting unit and Vivendi's 86-percent subsidiary Vivendi Universal Entertainment, would be called NBC Universal and would be owned 80 percent by the US group and 20 percent by VUE's shareholders.
"The merger will create one of the world's most profitable and fastest-growing media companies, with an estimated value of 43 billion dollars (37 billion euros)," GE and Vivendi said in a joint statement.
Under terms of the agreement, debt-laden Vivendi Universal would receive 3.3 billion dollars (2.79 billion euros) in cash for contributing Vivendi Universal Entertainment to the merged group.
As part of the deal, the new company would also assume about 1.7 billion dollars in debt.
NBC Universal -- with assets ranging from the NBC US television network to the Universal film studios, as well as cable networks and theme parks -- would be headed by GE vice chairman and NBC chairm and and chief executive Bob Wright.
Vivendi Universal would hold three of the 15 seats on the board of NBC Universal, the companies said.
GE chairman and chief executive Jeffrey Immelt said in the statement: "The new NBC Universal will have the assets, the management team and the operating focus to prosper in a digital world and enhance value of GE and Vivendi Universal shareowners."
Vivendi and GE announced at the beginning of last month that they were in exclusive talks over the merger of NBC and VUE after a long bidding process for VUE.
The French group was auctioning off VUE as part of a plan to raise funds to pay down a massive debt built up under the leadership of former chief executive Jean-Marie Messier, who spent heavily on costly media assets at the height of the technology bubble.
Although the deal does not mark Vivendi's full exit from the vast US media market, it puts an end to the French company's ambitions to directly rival AOL Time Warner, the biggest media conglomerate in the world.
The new company was calculated to have expected revenues of 13 billion dollars this year if it had already existed and core earnings of nearly three billion dollars.
The merger was also expected to generate cost savings and revenue growth of 400-500 million dollars.
Vivendi's shares gained on the news even though the terms of the deal came as had been expected by the market.
Shortly after the announcement, its shares were up 1.11 percent at 16.42 euros while the CAC 40 index of leading French shares gained 0.37 percent.
GE's shares were not trading when the announcement was made because financial markets in New York were closed.
A Paris-based dealer said: "At first glance there is nothing surprising, not in one direction nor the other"
"The figures announced were the same ones the company gave before, the division of capital (in the new entity) was the same as the companies said before," he added.
GE and Vivendi said in the statement they expect the deal, which has to be approved by antitrust authorities, to be completed in the first half of 2004.
Vivendi, GE agree to form new media empire
Wed Oct 8, 8:17 AM ET
PARIS (AFP) - French media and communications group Vivendi Universal and US conglomerate General Electric said they had agreed to merge their US entertainment assets marking the beginnings of a huge new US media group.
The new company, which will combine GE's NBC broadcasting unit and Vivendi's 86-percent subsidiary Vivendi Universal Entertainment, would be called NBC Universal and would be owned 80 percent by the US group and 20 percent by VUE's shareholders.
"The merger will create one of the world's most profitable and fastest-growing media companies, with an estimated value of 43 billion dollars (37 billion euros)," GE and Vivendi said in a joint statement.
Under terms of the agreement, debt-laden Vivendi Universal would receive 3.3 billion dollars (2.79 billion euros) in cash for contributing Vivendi Universal Entertainment to the merged group.
As part of the deal, the new company would also assume about 1.7 billion dollars in debt.
NBC Universal -- with assets ranging from the NBC US television network to the Universal film studios, as well as cable networks and theme parks -- would be headed by GE vice chairman and NBC chairm and and chief executive Bob Wright.
Vivendi Universal would hold three of the 15 seats on the board of NBC Universal, the companies said.
GE chairman and chief executive Jeffrey Immelt said in the statement: "The new NBC Universal will have the assets, the management team and the operating focus to prosper in a digital world and enhance value of GE and Vivendi Universal shareowners."
Vivendi and GE announced at the beginning of last month that they were in exclusive talks over the merger of NBC and VUE after a long bidding process for VUE.
The French group was auctioning off VUE as part of a plan to raise funds to pay down a massive debt built up under the leadership of former chief executive Jean-Marie Messier, who spent heavily on costly media assets at the height of the technology bubble.
Although the deal does not mark Vivendi's full exit from the vast US media market, it puts an end to the French company's ambitions to directly rival AOL Time Warner, the biggest media conglomerate in the world.
The new company was calculated to have expected revenues of 13 billion dollars this year if it had already existed and core earnings of nearly three billion dollars.
The merger was also expected to generate cost savings and revenue growth of 400-500 million dollars.
Vivendi's shares gained on the news even though the terms of the deal came as had been expected by the market.
Shortly after the announcement, its shares were up 1.11 percent at 16.42 euros while the CAC 40 index of leading French shares gained 0.37 percent.
GE's shares were not trading when the announcement was made because financial markets in New York were closed.
A Paris-based dealer said: "At first glance there is nothing surprising, not in one direction nor the other"
"The figures announced were the same ones the company gave before, the division of capital (in the new entity) was the same as the companies said before," he added.
GE and Vivendi said in the statement they expect the deal, which has to be approved by antitrust authorities, to be completed in the first half of 2004.
