Vivendi's chief operating officer Jean-Bernard Levy, left, and NBC chairman Robert Wright discuss the pending deal for the French firm's U.S. entertainment assets.

Vivendi Universal SA and General Electric Co. agreed Tuesday to enter exclusive negotiations to merge Vivendi’s U.S. entertainment assets and GE’s NBC division, the French media and utilities conglomerate said.

The new company, if formed, would be a major media player, with the NBC television network, cable networks like MSNBC and CNBC and movie-maker Universal Pictures — which produced such recent movies as “Seabiscuit” and “The Hulk.” (MSNBC is a Microsoft-NBC joint venture.)

Other components of the new firm would include the Universal television studios, which make NBC’s “Law and Order” and “Jerry Springer,” several theme parks and Universal’s three cable channels, USA, Sci-Fi and Trio.

Vivendi said the company that would be formed if a final deal is reached would be 80 percent owned by Fairfield, Conn.-based GE and 20 percent by Vivendi. It would have revenues of $13 billion in 2003, Vivendi said in a statement.

The decision to go with GE followed months of negotiations and efforts by Vivendi to find a partner for its glamorous entertainment assets.

Vivendi said the combined media and entertainment business would be headed by Bob Wright, longtime leader of NBC and vice chairman of GE.

“We have developed a plan to create an exceptional media company, which would rank among the most profitable in the U.S.,” Vivendi Chairman Jean-Rene Fourtou said in a statement.

Wright said the new firm would be “superbly positioned to generate substantial growth both now and in the long term.”

Once the deal is closed, the shareholders of Vivendi Universal would receive $3.8 billion in cash and stock, and would reduce its debt by $1.6 billion as part of the transaction, Vivendi’s statement said.

“I think we are in front of a very good deal,” Vivendi board member Fernando Falco y Fernadez de Cordova said after emerging from a closed door meeting where the board weighed GE’s bid against another from a group led by investor Edgar J. Bronfman Jr.

Bronfman, who once controlled the Universal properties as chief executive of Seagram Co., spent the weekend in a last-ditch lobbying effort to salvage his bid, a source familiar with the matter told The Associated Press.

Vivendi Universal shares rose 4.1 percent to close at euro16.60 ($18.06) per share in Paris trading Tuesday. GE shares were up 36 cents at $29.93 in afternoon trading on the New York Stock Exchange.

Vivendi has been hoping to fetch $14 billion for the Universal assets to pay down huge debts run up during a buyout spree under former chief executive Jean-Marie Messier.

After a board meeting in Paris last week, Vivendi said an eventual agreement with either NBC or the Bronfman group would leave the French company with a “substantial” stake in a U.S. media group. It also said it would explore a public offering for the entertainment assets.

Some of the biggest titans of the U.S. media world expressed interest in Vivendi’s entertainment arm during the monthslong bidding process, including cable TV mogul John Malone of Liberty Media Corp., CBS and MTV parent Viacom Inc. and Metro-Goldwyn-Mayer Inc.

Both MGM and Malone said they were dropping out of the bidding process because they felt the price was too high. Viacom had expressed interest only in the cable channels, and was effectively left out of the final round of bidding when Vivendi said it would continue talks only with NBC and Bronfman’s group.

The Bronfman-led group includes Thomas H. Lee Partners, a private equity fund, and Cablevision Systems Corp., a cable TV company in New York that owns AMC, the Independent Film Channel and WE: Women’s Entertainment channels.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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