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November 10, 2009

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Comcast, GE agree on JV valuation

GENERAL Electric Co and Comcast Corp have agreed on a valuation of around US$30 billion for a joint venture between NBC Universal and Comcast, ironing out what has been a key obstacle in talks so far, a source familiar with the matter said on Sunday.

The resolution of that issue brings the parties one step closer to an agreement, but French media conglomerate Vivendi, which owns 20 percent of NBC Universal, has not yet signed off on a deal, the source said.

GE, which owns 80 percent of NBC Universal, declined comment, as did Comcast.

The two sides have been in talks to reach a deal that would give Comcast a 51 percent stake in the NBC Universal venture.

Advisers had also been trying to draft governance and exit provisions for GE's 49 percent stake that would be palatable to both sides, sources had told Reuters previously.

Comcast and GE have now resolved how to value the joint venture in the years after the deal closes, giving more clarity on how GE could exit its stake, the source said.

Exit provisions are critical in joint ventures because they specify when and how a partner can get out.

In the case of GE, many of its shareholders have urged the conglomerate to offload NBC Universal, whose broadcast and cable networks, movie studio and theme parks are considered misfits among GE's mostly industrial operations.

The parties have discussed an option for GE to sell all or part of its stake in the new venture to Comcast within seven years, sources have said previously.

Under the terms that were being discussed, the venture would consist of NBC Universal and Comcast's collection of cable networks. Comcast would also contribute between US$4 billion and US$6 billion.


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