NBC Universal Clinches Deal to Buy Weather Channel

Posted by: Jena McGregor on July 6, 2008

Long before April’s rare earnings miss at General Electric, which ramped up some analysts’ calls for the industrial conglomerate to sell off some of its businesses, many on Wall Street have scratched their heads over NBC Universal, GE’s media and entertainment arm. Some have called for the company, whose booming infrastructure business can seem like an odd fit with a TV network and movie studio, to spin off the peacock part of the portfolio.

But NBCU’s clinching today of a deal to buy the Weather Channel, together with private equity firms Blackstone Group and Bain Capital, is a further sign that GE is investing in the unit, and that such a move is unlikely. The New York Times is reporting that the closed deal is a result of three weeks of negotiations and that more than half of the just under $3.5 billion deal will be paid for in equity. The Weather Channel will also apparently be run independently from NBC Weather Plus, GE’s current meteorological offering.

The Weather Channel’s web site is one of the top traffic sites in the U.S., and thus the acquisition should fit well into one of CEO Jeff Immelt’s six major themes—the power of digital media. But will investors see the move as sunny or foggy? That forecast remains to be seen.

Reader Comments

Kabir

July 6, 2008 10:22 PM

I believe, GE is going to amass many such media takeovers, create a giant portfolio and sell it may be by Q1'10 - after showing healthy 4 QTR revenue, growth.

Tom Blackmore

July 6, 2008 11:05 PM

Oh No! Network tv has got it hands on a quality tv service.How long before they screw up the weather channel.

arggg

July 6, 2008 11:56 PM

more m&a by big business. another one bites the dust. so few own so much and many will so few choices end of rant.

Bill Rothschild

July 7, 2008 9:49 AM

GE and the Immelt team can't seem to resist making deals and increasing the complexity of the company. The Weather Channel is just one of several acquisitions GE has made in the last week. Its Aviation business acquired a Czech jet engine producer to compete against Pratt. The Capital business continues to make both acquisitions in Europe while divesting its Japanese loser.
Immelt continues to have a 20 year plan which may or may pay off, but it makes it difficult to assure the stockholders it can make its promised numbers.

Bill Rothschild, author of The Secret To GE's Success.

carlleigh

July 7, 2008 10:24 AM

The networks losing viewers the quickest is buying one of the most popular networks. Good move for NBC, bad move for Weather Channel. Neither has a very good reputation.

Time for Fox to invest in its own weather channel. They could start by simply offering all the news that has clamped of by NBC and/or the Weather Channel. You know: global warming... its a hoax...

1 Billion investment can probably capture the market in two years just by telling the truth. Being Fair and Balanced.

Troy

July 7, 2008 12:13 PM

I would love to agree that this may be a sign they aren't going to spin off the peacock. However GE is excellent at evaluating their products and adding to them if it makes it a stronger product to get rid of. They did this with their reinsurance business before it was sold off to SwissRe as well.

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