Comcast buys GE's stake in NBCUniversal for $16.7 billion

Posted: February 14, 2013

Comcast Corp., flush with billions of dollars from sales of assets and bonds, rapidly accelerated its acquisition of NBCUniversal on Tuesday, saying it would pay $16.7 billion for the 49 percent of the entertainment, news and film conglomerate that it doesn't already own.

The Philadelphia cable giant expects the deal to close within the next six weeks. The seller is General Electric Co., which sold Comcast 51 percent of NBCUniversal in 2011.

Comcast and GE were expected to operate NBCUniversal as a joint venture until at least mid-2014, and Comcast could have continued the joint venture through 2018.

Brian Roberts, Comcast chief executive officer and chairman, said in a statement that the "terms of the transaction are attractive" and that Comcast planned for the deal.

Comcast, through its NBCUniversal subsidiary, also will add to its portfolio of trophy properties the NBC studios and offices at 30 Rockefeller Plaza in Manhattan and the CNBC headquarters in Englewood Cliffs, N.J., for $1.4 billion. Comcast, after the deal, will own about 1.4 million square feet of space at 30 Rock.

"Never a dull moment," one Comcast executive wryly observed Tuesday.

At the same time, signaling that it would continue to return profits to shareholders, Comcast announced that it boosted its per-share dividend by 20 percent to 78 cents a year and would repurchase $2 billion of Comcast stock this year.

In after-market trading, Comcast shares soared more than 8 percent, or $3.25 a share, to $42.22.

GE's stock rose as much as 82 cents a share, or 3.6 percent, to $23.40, in after-hours trading.

Comcast, in yet a third announcement, released its fourth-quarter earnings a day early. Fourth-quarter revenue rose 6 percent to $15.9 billion, and net income jumped to $1.8 billion from $1.5 billion in the year-ago period.

In 2012, Comcast generated $62.6 billion in revenue - including NBCUniversal - and had $7.9 billion in net income.

NBCUniversal includes the NBC and Telemundo broadcast networks, pay TV channels such as USA, CNBC, Bravo and SyFy, the Universal Pictures movie studio, and theme parks in Florida and California.

"NBCUniversal's results principally highlight the improving performance of our broadcast businesses," Roberts said in the earnings statement. "Our ongoing investments in programming, technology and new products are driving innovation and supporting this strong performance."

The company was scheduled to discuss earnings in a conference call with analysts Wednesday.

There was hope that Comcast's legacy cable-TV business would finally begin adding TV customers after years of losses because of competition from telephone companies and satellite-TV operators. It just missed, losing 7,000 TV customers in the fourth quarter, compared with 17,000 in the year-ago quarter.

In contrast, Time Warner Cable lost 129,000 TV customers in the fourth quarter. It is the nation's second-largest cable-TV operator, with 12 million TV customers. Comcast is the nation's largest, with 22 million.

Jonathan Atkin, an analyst with RBC Capital Markets, told the Associated Press that the transaction could make Comcast less vulnerable to rising TV programming costs, comparing it to Time Warner Cable, whose shares have plunged 13 percent since it reported last month that profit margins were being squeezed by higher programming costs.

Comcast "is less exposed to that," he said.

Michael Angelakis, Comcast's chief financial officer and vice chairman, said that the accelerated acquisition of GE's stake in NBCUniversal shows "great confidence in the original thesis of the deal," and that Comcast would remain within its debt targets.

"We have built up some cash with the sale of some of our nonstrategic assets," he said.

Comcast sold its ownership stake in A&E Television Networks L.L.C. and a block of wireless spectrum to Verizon Wireless in 2012, resulting in gains of slightly more than $5 billion. Comcast also has raised about $7 billion through debt offerings in recent months, benefiting from low interest rates.


Comcast Chronology

Comcast Corp. announced Tuesday that it plans to buy the rest of NBCUniversal from General Electric Co. by the end of March, years ahead of schedule. Comcast now owns 51 percent, and GE the remaining 49 percent.

Some key events in Comcast's history:

1963: Ralph Roberts buys American Cable Systems, a 1,200-subscriber cable TV operator in Tupelo, Miss., for $500,000.

1969: Company renamed Comcast - from "communications" and "broadcast."

1988: Following several acquisitions, Comcast buys 50 percent of Storer Communications Inc. to become the nation's fifth-largest cable TV operator, with more than two million subscribers.

1990: Ralph Roberts' son, Brian, is named president.

1994: Comcast jumps to third place in cable after buying Maclean Hunter's U.S. cable operations. Comcast now has 3.3 million subscribers. Comcast and partners invest in the Golf Channel.

1996: Comcast launches its first high-speed Internet service - in Baltimore.

1997: Microsoft Corp. invests $1 billion in Comcast. Comcast buys a controlling interest in E! Entertainment.

2002: Comcast buys AT&T Broadband cable systems to become the nation's largest cable TV operator, with 22 million customers. Comcast unveils high-definition TV and video-on-demand services. Brian Roberts takes on the additional role of CEO.

2004: Comcast makes unsuccessful hostile bid for Walt Disney Co. for $54 billion. Brian Roberts adds chairman to his titles.

2005: Comcast unveils digital phone service and creates division to develop the company's Web portals and acquire Internet businesses.

2006: Comcast signs video-on-demand distribution deal for Disney content and buys out Disney's stake in E! Entertainment and the Style Network. Comcast and Time Warner Inc.'s cable division buy the assets of bankrupt Adelphia Communications and swap ownership of some areas. Comcast hits 24 million subscribers.

2009: Comcast continues to attract DSL subscribers from phone companies to become the nation's largest Internet service provider. It also becomes

the third-largest phone company. GE agrees to sell controlling stake in NBCUniversal to Comcast.

2011: Comcast completes deal for NBCUniversal after the government approves it, with conditions intended to prevent it from keeping NBC programming to itself at the detriment of other cable operators and video websites.

2012: Comcast appends NBC's peacock logo on top of its corporate name in a new logo of its own. Comcast ends the year with 22 million subscribers.

2013: Comcast announces that it is buying the rest of NBCUniversal from GE for $16.7 billion, doing so years early.

SOURCES: Comcast Corp., AP research


Contact Bob Fernandez at 215-854-5897 or bob.fernandez@phillynews.com or follow on Twitter @bobfernandez1.

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