- The Washington Times - Wednesday, December 2, 2009

For General Electric Co., the NBC entertainment division was always an odd fit.

It’s a marriage that will likely soon end. As GE prepares for an expected $30 billion deal that will give control of NBC to cable TV operator Comcast Corp., the conglomerate is shifting its focus back to its industrial divisions.

GE is shrinking its finance arm, which has been severely buffeted by the financial crisis. It has sold some businesses and shopped others around. And it is chasing nearly $200 billion in stimulus money from worldwide governments, much of it earmarked for such products as medical equipment and wind turbines. This new GE will likely look a lot like GE did before it acquired NBC in 1986.

“When you are running a company like GE, your roots are ultimately in manufacturing,” said Nicholas Heymann, an analyst with Sterne Agee who once worked for GE as an auditor.

GE has reached a tentative agreement to buy out the 20 percent stake in NBC Universal that is held by French media company Vivendi SA, according to a person with knowledge of the deal. GE and Comcast are then expected to turn NBC Universal into a joint venture, with Comcast holding a 51 percent stake. GE likely would fully leave the partnership in a few years.

The financial crisis and recession of the past year have been difficult for GE, which is based in Fairfield, Conn., and has 323,000 employees. The company was forced to slash its dividend by 68 percent. It lost its coveted top bond rating, and its stock fell as much as 90 percent below the peak it had hit in 2000. GE is still trying to work through big losses at its GE Capital lending unit, once the source of half the conglomerate’s profits, in areas such as commercial real estate and credit cards.

GE earned $8.1 billion over the first nine months of this year on revenue of $115 billion, but that marked a 43 percent drop in profit and a 15 percent revenue decline.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide