Comcast Buying Remaining Stake in NBCUniversal for $16.7 Billion

Andrew Klips  |

Tuesday was a busy day for Comcast Corp. (CMCSA).  The media and technology juggernaut said Tuesday afternoon that it will spend $16.7 billion to purchase all of General Electric Co.’s (GE) 49 percent stake in their joint venture ownership of NBCUniversal, ending GE’s divesture in the project as much as five years ahead of schedule. Comcast also said in a statement that NBCUniversal will buy from General Electric the properties used by NBCUniversal at 30 Rockefeller Plaza and CNBC’s headquarters in Englewood Cliffs, New Jersey for about $1.4 billion.  Comcast released a fresh logo today that now includes the NBC logo.

The transaction, which makes Philadelphia-based Comcast the largest cable provider in the country, is expected to close by the end of March.

“Our decision to acquire GE's ownership is driven by our sense of optimism for the future prospects of NBCUniversal and our desire to capture future value that we hope to create for our shareholders,” said Brian L. Roberts, Chairman and CEO of Comcast.

Roberts added in a separate statement, “To underscore our confidence, we are increasing our dividend by 20 percent and plan to repurchase $2 billion of our stock this year.”

Comcast will fund the transaction with $11.4 billion in cash it has on hand, $4.0 billion of subsidiary senior unsecured notes to GE, $2.0 billion or borrowings under credit facilities and $725 million of subsidiary preferred stock to GE.

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Separately, Comcast reported that it has reached an agreement with Fox Networks for a new distribution deal.  In a pact to deliver content across multiple platforms, Comcasat will provide Fox Broadcasting’s and Fox Television Stations’ entertainment, sports and local news content to 22 million Comcast Xfinity TV customers across televisions, computers, smartphones, tablets, gaming consoles and internet-enabled televisions.

Financial terms of the deal were not disclosed.

Additionally, Comcast released its financial results for the year and quarter ended December 31, 2012.

Revenue for the fourth quarter of 2012 increased 5.9 percent to $15.9 billion, while operating income increased 12.9 percent to $3.3 billion.  For the quarter, Comcast earned 56 cents per share, up 19.1 percent from 47 cents in the year prior quarter. Excluding a favorable tax adjustment and other items, EPS increased 10.6 percent from 47 cents in Q4 2011 to 56 cents in the latest quarter.  Total sales for the quarter were $15.94 billion, up 5.9 percent from the year earlier quarter.

The results were basically in line with Wall Street expectations.

For the year ended December 31, 2012, revenue increased 12.0 percent to $62.6 billion, while operating income increased 13.6 percent to $12.2 billion.  For the full year 2012, EPS was $2.28, a 52.0 percent increase from the $1.50 reported in 2011.

Shares of CMCSA closed Tuesday trading ahead by 0.85 percent at $38.97.  With the NBCUniversal deal and earnings news hitting the wires, shares swelled by another 9 percent to $42.50 in extended trading.

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