NBC-Vivendi merger to create behemoth

US television network NBC won Vivendi Universal's marathon show-business auction late on Tuesday with a proposed merger to create a new entertainment industry giant worth more than $40 billion.

    Vivendi Universal head Jean-Rene Fourtou with shareholders

    NBC, a unit of General Electric Co, clinched exclusive negotiating rights to finalise a deal that would give it a major film studio, more cable channels and theme parks to vault the No 1 US broadcast network, closer to the ranks of such global titans as Walt Disney Co and Viacom Inc.


    If the deal is completed, the new company, to be called NBC-Universal, would include Vivendi's Universal Pictures, the Hollywood studio behind The Hulk and The Mummy. Also in the kitty will be cable television network USA, with NBC's broadcast network and cable channels, CNBC and Bravo.


    New chief


    "Together we have developed a plan to create an exceptional media company, which would rank among the most profitable in the United States," said Vivendi Chairman and CEO Jean-Rene Fourtou.


    NBC Chief Executive, Bob Wright, would head the new company.


    Under the terms set out so far, GE would take 80% of NBC-Universal while Vivendi would keep 20%. Shareholders in the Vivendi Universal Entertainment unit would also receive a $3.8 billion "cash consideration."


    Vivendi Chief Operating Officer, Jean-Bernard Levy, said the French conglomerate had achieved its goal of doing a deal that valued its US entertainment assets at $14 billion, giving an overall value for the merged entity of around $42 billion.


    "Together we have developed a plan to create an exceptional media company, which would rank among the most profitable in the United States"

    Jean-Rene Fourtou, Vivendi Chairman and CEO

    The decision brings an end to a long hot summer of negotiations over Vivendi's entertainment empire that gripped the media industry and ran up huge bills for an army of advisers, as some of Hollywood's biggest egos jostled for position.


    NBC had long been Vivendi's favoured choice, but Vivendi Vice Chairman Bronfman fought hard to stay in the race. "Edgar Bronfman is bewildered," said one source close to the auction. "But there was little hope of swaying Vivendi today."


    In the end, Vivendi had to choose between Bronfman's offer of upfront cash to cut its debts, or the prospect of a better return in the long run under an NBC deal.


    However, there is no guarantee a final deal will be struck.  Vivendi and NBC still need to navigate a complex web of contracts and tax liabilities. But Fourtou was confident a deal could be wrapped up by the end of September. 

    SOURCE: Reuters


    Meet the deported nurse aiding asylum seekers at US-Mexico border

    Meet the deported nurse helping refugees at the border

    Francisco 'Panchito' Olachea drives a beat-up ambulance around Nogales, taking care of those trying to get to the US.

    The rise of Pakistan's 'burger' generation

    The rise of Pakistan's 'burger' generation

    How a homegrown burger joint pioneered a food revolution and decades later gave a young, politicised class its identity.

    'We will cut your throats': The anatomy of Greece's lynch mobs

    The brutality of Greece's racist lynch mobs

    With anti-migrant violence hitting a fever pitch, victims ask why Greek authorities have carried out so few arrests.