Comcast Corporation(CMCSA) reported on Tuesday that they plan to buyback their remaining shares owned by General Electric Company(GE) in NBCUniversal which would give them full control over the company.
Comcast has announced that they plan to spend $16.7 billion for the remaining 49% of NBC Universal from GE. This deal, will make Comcast the full owner of one of the largest and most profitable networks in the U.S. The deal with also include the acquisition of the NBCU floors in 30 Rockefeller Center and CNBC’s headquarters in New Jersey for $1.4 billion.
The deal will be finalized in the first quarter of 2013. Comcast will pay GE $11.4 billion in cash, $4 billion in subsidiary senior unsecured notes, and $725 in preferred stock.
CMCSA purchased 51% of NBC Universal in 2011 following approval from the Justice Department, the deal to purchase the remaining 49% comes two years before previously expected.
Additionally, Comcast reported that they have increased their dividend by 20% to 78 cents annually. The company also plans to buyback $2 billion worth of shares during 2013.
GE reported that this deal will result in a higher return to shareholders. The company’s board has increased its share buyback program to $35 billion, with $23 billion remaining. In 2013, the company expects to buy back $10 billion in shares.
CEO Jeff Immelt commented, “this transaction allows us to significantly increase the cash we plan to return to shareholders in 2013, to approximately $18bn, and to continue to invest in our industrial business.”
The plan to sell its stake in NBCU was part of GE’s plan to removed itself from the media business. The company hoped to sell off NBC by mid-2014.
General Electric shares were up 80 cents, or 3.54% during premarket trading Wednesday. The stock has increased 20% in the past year. Comcast shares were up $2.93, or 7.52% during premarket trading, and has increased 43% in the past year.
The Bottom Line
Shares of General Electric Company(GE) have a 3.37% yield, based on Tuesday’s closing price of $22.58. Comcast Corporation(CMCSA) shares will now have a 2.00% yield, based on the higher dividend payout and Tuesday’s closing price of $38.97.