After Vivendi's second board meeting in a week, Vivendi Universal
According to a company press release, the merger would create an entertainment megalith with $13 billion in annual revenue, "industry-leading annual EBITDA of $3 billion, and the highest operating margins of any major television media company in the United States." The deal would leave Vivendi with 20% ownership of the merged entity, $1.6 billion in reduced debt, and $3.8 billion in cash considerations from a GE commitment to issue GE stock. That's key, as Vivendi looks to pay down its $14 billion in debt.
In addition to #1 ranked NBC, the combined entity would have a complementary portfolio of cable brands, including USA, SciFi Channel, and CNBC. The company has synergistic possibilities, as it could take advantage of Universal's library of movies -- including such blockbusters as The Fast and the Furious and 2 Fast 2 Furious -- by airing them on NBC's networks. Another possibility is "the broadcasting of NBC events on-site at theme parks around the world," much the same way that ESPN and ABC utilize Disney World.
Everybody has a chance to win here. GE gets content; Vivendi gets a lifeline. Vivendi is up almost 8% to $18.21 in early afternoon trading.