Paris - US television network NBC, a unit of General Electric (GE), won Vivendi Universal's show business auction yesterday which could lead to a multibillion-dollar merger to create a new entertainment industry giant.
Vivendi Universal and GE agreed to enter exclusive negotiations to merge Vivendi's coveted US entertainment assets and GE's NBC division, the French media and utilities conglomerate said.
The NBC deal brings together assets including Vivendi's Universal Pictures, the Hollywood studio behind The Hulk and The Mummy, and cable television network USA, with NBC's broadcast network and cable channels CNBC and Bravo.
Vivendi, the world's second-biggest media firm, said after a board meeting that the new company, if formed, would be 80 percent owned by GE, while Vivendi would hold 20 percent.
As part of the deal, Vivendi said shareholders of Vivendi Universal Entertainment would receive $3.8 billion of cash consideration against a commitment by GE to issue its stock as well as a $1.6 billion debt reduction.
After eleventh-hour talks with two contenders, Vivendi held a special board meeting to vote on eliminating a consortium led by Edgar Bronfman jnr and approve a preliminary deal with GE's NBC for a show business merger.
NBC has been Vivendi's favoured choice after proposing a merger to create a media giant potentially worth more than $40 billion that would vie with US heavyweights including Walt Disney.
The decision brings an end to a long period of negotiations that gripped the media industry and ran up huge bills for an army of advisers as some of Hollywood's biggest egos jostled for assets that include Universal Studios.
Vivendi shares rose 4.1 percent to e16.60 (R131) in Paris.