1. Headline
  1. Headline
CNBC
updated 10/1/2009 3:40:45 PM ET 2009-10-01T19:40:45

General Electric and Comcast are in talks about a deal in which GE would spin off its NBC Universal unit into a new company that would be merged with the content assets of Comcast, according to people familiar with the negotiations.

  1. Stories from
    1. 12-Year-Old with Rare Always-Hungry Condition Lands Back in Hospital
    2. Who Still Makes Jamie Foxx Starstruck?
    3. Ginnifer Goodwin's Romantic Monique Lhuillier Wedding Gown: See a Sketch!
    4. Three Books by Gabriel Garcia Marquez That You Must Read
    5. Julia Roberts, Mark Ruffalo Shine in The Normal Heart Trailer

The deal under consideration would allow Comcast to take 51 percent economic control of NBC Universal through its contributions of content assets such as the "E" channel, the Golf Channel and a group of regional sports networks and the contribution of as much as $7 billion in cash to the new company.

The prospective deal is complex and is far from a certainty. Under the scenario being contemplated, GE would spin off NBC Universal, along with a significant amount of debt, into a new company.

Comcast would merge content assets that it values at as much as $6 billion, along with cash, so that it would take a 51 percent ownership stake.

GE would control 49 percent and — as part of the spin off of NBC Universal — would be able to contribute as much as $12 billion in debt to the spun off entity, say people familiar with the negotiations.

Bankers on both sides of this deal say nothing is imminent and — given the high degree of difficulty in making this work — they are far from certain a deal will get done.

Still, the willingness of GE to consider shedding NBC Universal, which includes CNBC and CNBC.com, is of great significance. GE and Comcast officials declined comment. (Msnbc.com is a joint venture of Microsoft and NBC Universal.)

Under the scenario being contemplated, Comcast would not issue equity or endanger its investment-grade credit rating.

These talks have been prompted by the prospect that Vivendi of France will soon tell GE it plans to exit its 20 percent stake in NBC Universal.

Under the plan being discussed between GE and Comcast, GE would buy Vivendi's stake and put the borrowings that fund that purchase on NBC Universal's balance sheet. It would then add further debt to NBC Universal and spin it off.

Assuming the company was valued at $35 billion, and subtracting $12 billion in debt, Comcast would need to contribute equity valued roughly at $13 billion to garner a 51 percent stake.

Over time, Comcast would likely increase its ownership stake in the new company and could fund those purchases through the cash flow it receives from the company itself. Comcast's CEO Brian Roberts has long coveted control.

© 2012 CNBC, Inc. All Rights Reserved

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

More on TODAY.com

  1. Doomed South Korean ferry’s captain taken into custody

    The captain of the sunken ferry in South Korea was taken into custody Friday and is facing five charges, including criminal negligence.

    4/18/2014 8:35:55 PM +00:00 2014-04-18T20:35:55
  2. Did South Korea ferry’s sharp turn cause it to sink?
  3. Teen ferry survivors comforted in devastated town
  1. Courtesy of Shawn Stock

    'You helped me': After 23 years, Desert Storm veteran thanks pen pals

    4/18/2014 8:51:52 PM +00:00 2014-04-18T20:51:52
  1. Dylan Dreyer / TODAY

    The gang is back together! Prove you’re a big fan of Weekend TODAY

    4/19/2014 11:14:33 AM +00:00 2014-04-19T11:14:33
TODAY's Takeaway
  1. TODAY

    Savannah overshares; Billy Crystal brings ‘700 Sundays’ to TV

    4/18/2014 8:29:08 PM +00:00 2014-04-18T20:29:08