General Electric (GE) and Vivendi have agreed on a $5.8 billion (Ôé¼3.8 billion) valuation of the French companyÔÇÖs 20 per cent stake in television and movie company NBC Universal (NBCU).
The valuation clears the way for GE to sell control of NBCU to US-based cable giant Comcast.
GE must buy out Paris, France-based VivendiÔÇÖs interest before it can sell its controlling stake in NBCU.
GE is keen to sell due to growing losses at NBCU; however, Comcast, the biggest cable operator in the US, is keen to buy in order to control more of the television programmes and movies it offers through its cable systems.
Under the terms of a joint venture with GE, Comcast would contribute its own cable channels, including Versus, the Golf Channel, and the E Entertainment channel, as well as around $5 billion (Ôé¼3.3 billion) in cash.
A Comcast-GE joint venture would create one of the worldÔÇÖs largest media companies.
NBCU is currently one of HollywoodÔÇÖs biggest movie studio and television networks.
Comcast would own 51 per cent of the joint venture and GE would retain a 49 per cent stake, with the possibility of reducing ownership over a period of several years.
The $5.8 billion settlement with GE will provide French Vivendi with much needed funds following its recent $4.2 billion (Ôé¼2.8 billion) takeover of 54 per cent of GVT, a Brazilian broadband operator.
It is not yet clear whether GE will pay Vivendi the full $5.8 billion up front for its stake or seek to stagger the payments, since it is expected that the Comcast deal will take up to a year to clear regulatory hurdles.
With the value of VivendiÔÇÖs stake agreed, an announcement concerning the Comcast-GE joint venture is now expected as early as next week.
ComcastÔÇÖs deal to buy a 51 per cent stake in NBCU for $30 billion (Ôé¼19.9 billion) was expected to be announced last week, but was delayed by GEÔÇÖs negotiations with Vivendi over the value of its stake.
If the Comcast deal doesn't close by the end of 2010 however, GE may have to buy out as much as $2 billion (Ôé¼1.3 billion) of Vivendi's stake in advance.
Vivendi owns the Canal+ Group and Universal Music Group, as well as stakes in Maroc Telecom and Activision Blizzard.
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