Comcast-NBC Universal Joint Venture Deal
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Case Code: BSTR364 Case Length: 19 Pages Period: 2004-09 Pub Date: 2010 Teaching Note: Not Available |
Price: Rs.300 Organization: Comcast Corporation, NBC Universal, GE Industry: Media and Entertainment Countries: US Themes: Joint Venture, Merger and Acquisition |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
The Deal and its Rationale
The global financial crisis of 2008-09 affected GE's profitability adversely (Refer to Table II for GE's Financial Highlights between 2004 and 2008). Its financial arm GE Capital invested large amounts in the commercial real estate market where it incurred significant losses...
Potential Synergies
According to reports, the joint venture company would own one out of every five viewing hours on TV in the US. The deal would enable Comcast to bring programming to consumers on every platform. According to Roberts, "This deal is a perfect fit for Comcast. In particular, NBCU's fast-growing, highly profitable cable networks are a great complement to our industry-leading distribution business."...
The Response
The joint venture deal between GE and Comcast received a mixed response from industry experts. Some analysts were of the opinion that the deal was likely be approved by the regulators. Paul Gallant, a telecom regulation analyst, said, "The primary reason is that the two companies do not have a great deal of product overlap, and thus the competitive concerns appear to be fairly limited."...
The Road Ahead
As of early January 2010, while Comcast and GE were waiting to get approval from the regulators for their joint venture, there was some skepticism among industry experts about the price Comcast would pay for its 51 percent stake in New NBCU...
Exhibits
Exhibit I: Portfolio of Top Five Cable Channels in the US in 2009
Exhibit II: Key Events at Comcast Corporation (1963 - 2009)
Exhibit III: Comcast's Revenue and Profit (2004 - 08)
Exhibit IV: Milestones Achieved by NBCU Over the Years
Exhibit V: Total Revenues of US Cable Owners by Majority and Wholly Owned Networks in 2008
Exhibit VI: Logos of Comcast and NBC Universal
Exhibit VII (A): Assets/Properties Owned by NBC and Comcast
Exhibit VII (B): The Combined Assets/Properties Owned by New NBCU
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