NBC, the largest of America’s big four national television networks and a wholly-owned unit of the General Electric Company, entered Tuesday into exclusive negotiating rights with French entertainment conglomerate Vivendi Universal. Under the terms of the envisaged deal GE/NBC will own around 80% of the combined company. Vivendi 20%.

While much hard talking remains to be done, the value of the deal is believed to hover somewhere near to Vivendi’s proclaimed target of $14 billion (€12.98bn; £8.94bn), although only $3.8bn of this will be upfront. The balance is likely to be realised via phased share sales from 2006 onward.

The French company’s US assets will be melded with those of NBC, creating a media and entertainment leviathan comprising Universal Pictures film studios, its TV-production unit, three cable networks (CNBC, USA and Sci Fi), the Universal theme parks plus the NBC broadcast network.

Among Universal employees, however, it is feared that the price of this merger made in heaven will be a job loss scenario from hell. GE-NBC is known to be seeking economies in overheads of around $100 million, with the long knives likely to be wielded with most vigor at Universal Pictures’ landmark ‘black tower’ executive suite which looms above the company’s Hollywood lot.

Rival bidder Edgar Bronfman , Vivendi vice-chairman and owner of the Universal assets before their acquisition three years ago by Vivendi, was unavailable for comment. A spokesman, however, let it be known that Bronfman hoped “Vivendi Universal's strategic direction will reward its employees and shareholders”.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff