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GE, Comcast agree on NBC Universal’s worth

General Electric Co. and Comcast Corp have agreed on a valuation of around $30 billion for NBC Universal.
/ Source: Reuters

General Electric Co. and Comcast Corp have agreed on a valuation of around $30 billion for a joint venture between NBC Universal and Comcast, ironing out what has been a key obstacle in talks so far, a source familiar with the matter said on Sunday.

The resolution of that issue brings the parties one step closer to an agreement, but French media conglomerate Vivendi, which owns 20 percent of NBC Universal, has not yet agreed to a deal, the source said.

( is a joint venture of Microsoft and NBC Universal.)

The source spoke on condition of anonymity because details of the discussions have not been made public.

GE, which owns 80 percent of NBC Universal, declined comment, as did Comcast. Vivendi was not immediately available for comment.

The two sides have been in talks to reach a deal that would give Comcast a 51 percent stake in the NBC Universal venture.

Advisers had also been trying to draft governance and exit provisions for GE's 49 percent stake that would be palatable to both sides, sources had told Reuters previously.

Comcast and GE have now resolved how to value the joint venture in the years after the deal closes, giving more clarity on how GE could exit its stake, the source said.

Exit provisions are critical in joint ventures because they deal with when and how a partner can get out. In the case of GE, many of its shareholders have urged the conglomerate to offload NBC Universal, whose broadcast and cable networks, movie studio and theme parks are considered misfits among GE's mostly industrial operations.

The parties have discussed an option for GE to sell all or part of its stake in the new venture to Comcast within seven years, sources have said previously.

Cash tied to performance
Valuating Comcast's cable networks, Vivendi's stake and the proposed new company itself had been a key issue for several weeks and was delaying the complex deal, sources had said.

Comcast wanted to reduce the value of NBC Universal and increase the value of its cable networks to minimize the cash it would need to infuse in the new company, the source said.

Under the terms that were being discussed, the venture would consist of NBC Universal and Comcast's collection of cable networks. Comcast would also contribute between $4 billion and $6 billion.

The parties have now decided that Comcast's cash payment will depend partly on NBC Universal's financial performance. If the unit's performance worsens before the deal closes, Comcast could end up paying less, the source said.

Vivendi, whose stake would be bought out entirely, continues to be in talks with GE and is determined to get the best value for its 20 percent interest in NBC Universal, the source said. That valuation is still being discussed, the source added.

Every year between mid-November and mid-December, Vivendi has to decide whether to exercise its "put" option to sell its NBC Universal stake.

This year, Vivendi is eager to dispose of its stake, which it acquired as part of a 2004 deal to create NBC Universal, and is negotiating the valuation with GE, sources have said previously.

It's not clear what Vivendi is asking for, but it could be sweeteners beyond the price of the stake, a source previously told Reuters.