Despite the recent departure of Ross and Rachel, as well as the rest of the Friends gang from General Electric's
NBC's planned merger with the entertainment division of France's Vivendi Universal
The much ballyhooed arrangement had been stalled by a contractual dispute that Vivendi had with InterActiveCorp
Though Vivendi will retain a 20% stake in the new enterprise, called NBC Universal, today's announcement marks the end of the company's failure to become a global media firm. The onetime water utility company embarked on an ambitious, but unfocused, expansion strategy in the late 1990s, acquiring (among other things) theme parks, cable networks, and a movie studio. After the move backfired, Vivendi was forced to sell off the pieces, finally throwing in the towel on its U.S. entertainment assets for $3.65 billion in cash and the assumption of $1.7 billion in debt. Financing for the deal was obtained through a $3.8 billion stock offering made by General Electric in March. Vivendi will also have the right to monetize (read: liquidate) its ownership position for fair market value beginning in 2006.
The new NBC Universal will own a powerful array of assets. Aside from the namesake NBC network and Universal Studios, the new entity will also control Telemundo, the world's fastest-growing Spanish-language network, as well as television production operations, five premier theme parks, and recognized names such as the USA Network, the Sci-Fi channel, and CNBC.
Combined operations are expected to generate up to $15 billion in revenues by next year. Though this represents only 10% of General Electric's anticipated revenues, the experienced and capable management team assembled at NBC Universal will help ensure that the division remains a valuable component.
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Fool contributor Nathan Slaughter will surely miss Friends next season, and Frazier too, for that matter. He owns shares of GE.