GE’s (General Electric Co.) recent sale of its stake in NBC Universal, the television, cable, film and theme park giant operator to Compcast Corp. has given Chief Executive Officer Jeffrey Immelt instant cash. The selling price was approximately estimated to be about $8 billion dollars, which in turn would give scrutiny as to how he would steer the company, as one investor had said.
In this case, GE would have more time to focus on its priorities such as resources on aviation, medical imaging, finance and power generation. The deal would also allow NBC to be valued at nearly $37 billion dollars when the transaction completes after merger costs and a buyout of partner Vivendi SA’s 20 percent stake.
In turn, the deal would allow Immelt, the ninth CEO in its 117 year history to shift resources to the company’s main business and would hope to eventually engine the company’s growth in each of its main line.
Although GE would eventually lose the annual 11 percent return on their investment with NBA Universal, they will still be able to have hold on the company. Because Vivendi, the minority owner, agreed recently to sell its take to GE for $5.8 billion. That will let GE proceed with plans to put NBC Universal into a joint venture controlled by Philadelphia-based Comcast, the largest U.S. cable-TV provider. If the Comcast (CMCSA) transaction isn’t completed in September 2010, GE will buy 7.66 percent of Vivendi’s stake for $2 billion, according to the statement.
Under the terms announced today, GE can exit half of its remaining interest in the new venture 3 1/2 years into Comcast’s ownership and the remaining stake in year 7.
With Immelt’s leadership, the company has made more than $21 billion in acquisitions including the combination of Paris based Vivendi’s $14 billion in media assets. But as of now, the focus is to make sure they give investors a good explanation.