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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.
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