Hungry NBC Eyes Vivendi's 20% Stake in Joint Venture

11 May 2005

NBC Universal, the year-old joint venture owned by America's NBC (80%) and Vivendi Universal of France (20%) is keen to buy out Vivendi's minority stake if the French company puts it up for grabs in 2006.

According to NBCU chairman/ceo Bob Wright, the group is seeking to expand via acquisition and needs to know Vivendi's intentions.

Under the terms of last year's $14 billion (€10.90bn; £7.43bn) deal, Vivendi can sell up to $3bn of its stake in NBC Universal to NBC's parent, General Electric. Furthermore it has the right to dispose of another $4bn of stock in 2007.

Says Wright: "I think they are evaluating that [the sale of the first tranche]. They have to inform us around the end of the year, but, practically speaking, they would do it earlier because there would be a negotiation over price."

Subject to price NBC is keen to buy, its eagerness fuelled by cost savings of $125m last year, an anticipated $350m this year and $500m in 2006-7. It would also clear the deck for other deals.

Although committed to organic growth, Wright says the company will spend "more time looking at acquisitions". He is echoed by Brandon Burgess, evp in charge of international channels and business development, who rules out cable and other platform acquisitions while hinting at interests in technology.

"There's no question but that we will be acquisitive. GE, with the cashflow it has, wants to make acquisitions," says Burgess. "The question is how we can make smart acquisitions."

Data sourced from Financial Times Online; additional content by WARC staff