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GE, Vivendi Merge Entertainment Assets

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NEW YORK General Electric and Vivendi Universal have signed a definitive agreement that merges NBC and Vivendi Universal Entertainment (VUE), according to the companies.

Under terms of the agreement, the newly named NBC Universal will be 80 percent owned by GE, with 20 percent held by the shareholders of Vivendi Universal Entertainment. The new company will be helmed by NBC chairman and chief executive Bob Wright and is expected to generate approximately $13 billion in annual revenue.

"The combination of GE's and Vivendi Universal's respective media assets into a dynamic new company considerably strengthens our capabilities as a content provider and packager and sets the stage for long-term growth," said Wright, in a statement.

Along with the NBC Television Network, NBC News and NBC Sports, the new entity now owns production and distribution studio Universal Pictures, with its film library that includes over 5,000 titles including E.T. and Jurassic Park; TV production units NBC Studios and Universal Television, two large producers and distributors of television programming worldwide (including the successful Law & Order franchise); a host of successful cable networks, including USA Network, Sci-Fi Channel, CNBC, MSNBC (jointly owned with Microsoft), Bravo, and Trio; the NBC TV stations group, with 14 owned-and-operated stations; Spanish-language TV broadcaster Telemundo and its 15 Telemundo broadcast stations; and interests in five Universal theme parks.

Jean-Ren Fourtou, chairman and CEO of Vivendi Universal, said: "This is a very good agreement for Vivendi Universal's shareholders, both in terms of value creation and the reduction of our debt. This transaction will significantly lower Vivendi Universal's debt; at the end of 2004, it should be below EUR5 billion. The creation of NBC Universal will strengthen and safeguard our U.S. assets." Fourtou also predicted that Vivendi Universal will be profitable by the end of next year.

The new company will have an overall value of $43 billion. Vivendi Universal Entertainment shareholders will receive $3.8 billion when the deal closes early next year and NBC will take on $1.7 billion of Vivendi's debt.