Comcast is now moving into 30 Rockefeller Plaza.
Comcast, the nation’s largest cable operator, said on Tuesday night that it will pay $16.7 billion to buy General Electric’s (GE) remaining 49-percent stake in the NBC Universal joint venture. Comcast originally bought 51-percent of NBCUniversal in 2011 after winning antitrust approval from the Justice Department. Now it controls one of the industry’s largest and most profitable batch of networks including NBC, USA, SyFy and others.
In addition to the acquisition, NBCUniversal will purchase from GE the properties used by NBCUniversal at 30 Rockefeller Plaza and CNBC’s headquarters in Englewood Cliffs, NJ for approximately $1.4 billion. The transaction is subject to customary closing conditions and is expected to close by the end of the first quarter of this year, Comcast said.
Both transactions will be funded with $11.4 billion in cash on hand. They will also be funded by $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.
"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," said Brian L. Roberts, Chairman and CEO, Comcast Corporation. "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. We believe we are in a strong and unique position to continue to grow and build value in our combined company."
Comcast was founded in Tupelo, Mississippi back in June 1963 by Ralph Roberts, father of the current CEO, Brian Roberts, as American Cable Systems. The company was then incorporated in Pennsylvania as Comcast, short for Communication and Broadcast, a year later. Now the company is not only the nation's largest cable operator with more than 22 million subscribers, but a media and entertainment company.
Comcast had to "tread lightly" when it bought the first portion of NBCUniversal by adopting a "hands off" policy towards the news division to ensure its independence. The company also agreed to carry networks aimed at minority audiences, and remove itself from making management decisions relating to Hulu. The company also agreed to "net neutrality" provisions which included making NBC's programming available to other cable operators.
The new acquisition deal may not require Comcast to file for antitrust approval with either the Justice Department or the Federal Communications Commission given the company was given the green light in the first 2011 acquisition deal. The only way that the government may need to investigate again is if Comcast violates its consent decree, one antitrust expert said.