1. Speculate as to why GE may have found it difficult to manage NBC Universal. Be specific....
2. In theory, GE is responsible for 49% of NBC Universal’s debt because it owns 49% of the joint venture. Do you believe that Comcast should be responsible for only 51% of the debt rather than the entire $9.1 billion? Explain your answer.
3. Speculate as to the potential circumstances in which either Comcast or GE would be likely to exercise their call or put options. Which party do you believe is likely to exercise its options first and why?
4. What are the likely challenges Comcast and GE will have in integrating the various businesses that make up the joint venture? Be specific.
Following months of intense review, regulators approved the creation of a media giant consisting of Comcast Corporation and General Electric’s NBC Universal on January 17, 2011. GE and Comcast had announced a deal on December 2, 2009, to form a joint venture consisting of NBCU and selected Comcast assets. The transaction is noteworthy for its potential impact on the entertainment industry, its complexity, and as an exit strategy for GE from the media and entertainment business. The transaction also illustrates the payment of a significant control premium by Comcast.
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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