Deborah D. McAdams / 02.12.2013 05:00PM
GE Sells Remaining Stake in NBCU to Comcast for $16.7 Billion
Real estate assets included bring total to $18.1 billion
FAIRFIELD, CONN. – GE announced the sale of its remaining 49 percent
common equity interest in its joint venture with Comcast, which includes NBCUniversal,
as well as the NBCU floors in 30 Rockefeller Center, for $18.1 billion.
Under the terms of the transaction, GE will sell its remaining 49 percent
common equity stake in the NBCU joint venture to Comcast for $16.7 billion. GE
will receive $12 billion in cash, $4 billion in Comcast guaranteed debt, and
$0.7 billion of preferred stock. Additionally, GE Capital will sell the NBCU
occupied floors in 30 Rockefeller Center, and property in Englewood Cliffs, N.J., to
NBCU affiliates for $1.4 billion in cash. The transaction has been approved by
the boards of directors of GE and Comcast and remains subject to customary
closing conditions, which are expected to be satisfied before the end of the
first quarter of 2013.
The joint venture includes NBCU’s cable networks, filmed entertainment,
televised entertainment, theme parks, and unconsolidated investments, and
Comcast’s cable networks, including E!, Versus and the Golf Channel, its ten
regional sports networks, and certain digital media properties. An agreement
announced by the two companies in December 2009 reduced GE’s holding in NBCU
from 80 percent to 49 percent and made Comcast the majority partner. GE used
proceeds from that transaction to make strategic acquisitions in its Energy and
Oil & Gas businesses, which have performed well.
The GE board increased GE’s share repurchase authority to $35 billion, with
approximately $23 billion of authorization remaining as of today. With this
authorization, GE plans to accelerate its share repurchase program to
approximately $10 billion in 2013.
GE does not expect this transaction to materially impact the overall earnings
framework for 2013. GE expects the pre-tax gain from the sale of its remaining
NBCU interest of approximately $1 billion to be offset by restructuring in
2013. Due to the accelerated restructuring plan, cost savings should exceed the
previous target of $2 billion through 2014. GE expects earnings previously
forecast from the NBCU joint venture to be replaced by the effects of share
repurchases, cost reductions, and earnings growth in its industrial business,
for both 2013 and 2014. In addition, GECC expects the $0.5 billion after-tax
gain from the sale of property to be allocated to accelerating non-core asset
“We are very pleased with the investment we have made in
NBCUniversal, which generated a return of 14 percent over more than two
decades, “ said GE chairman and CEO, Jeff Immelt.J.P. Morgan provided financial advice to GE, and Weil, Gotshal & Manges was
the Company’s legal advisor. In addition, Goldman Sachs, Centerview Partners,
and CBRE provided strategic advice related to the transaction.