Comcast $16.7bn buyout of NBCUniversal Comcast will spend $18.1bn to buy GE's 49 per cent stake in NBCUniversal and properties including its "30 Rock" studios, more than a year ahead of the date planned when GE and Vivendi sold the US cable operator a majority stake in December 2009. Comcast is paying $16.7 billion for NBCUniversal, the broadcast, cable channels and film studio business, and $1.4bn for 1.4m sq ft of space at GE's 30 Rockefeller Plaza building in midtown Manhattan and CNBC's headquarters in New Jersey. The deal marks the final exit from the entertainment business for GE, which has been involved in radio and television broadcasting off and on since the 1920s. Comcast will get naming rights to 30 Rockefeller Plaza, said Michael Angelakis, its chief financial officer. This marks the third major technology, media and telecom transaction to be announced this month, injecting life into the deals market after a slow 2012. GE boosts coffers General Electric plans to use the proceeds from the $18.1bn sale of its stake in NBC Universal to Comcast for share buybacks, to cover restructuring costs in its industrial businesses, and to provide a war-chest for future acquisitions, writes Ed Crooks. Investors welcomed the news, and its shares rose 3.4 per cent in after-hours trading to $23.35, their highest for more than four years. Jeff Immelt, GE's chief executive, said the deal represented "another strong step forward in our industrial transformation," helping pay for cost reductions and margin improvements in the group's manufacturing divisions. GE is being paid a total of $13.4bn in cash for the NBCU stake and associated property, plus $4bn in Comcast debt and $725m in preference shares, which it will sell over time. Most of the cash is being put into share buybacks. GE is increasing by $10bn to $35bn the buyback authorisation. About $12bn of that has been used, leaving a further $23bn to come, of which GE expects to spend $10bn this year. The remaining funds will be used to cover restructuring costs, which GE expects will be about $1bn after tax this year. The accelerated restructuring will deliver cost savings of $2bn through 2014, the company said. Including the effect of share buybacks, cost reductions and profits growth, the disposal will have no effect on earnings in 2013 or 2014, Mr Immelt said. He added that some of the proceeds could also be used for industrial acquisitions, focused on "bolt-on" deals. He has previously said these acquisitions are likely to be in the $1bn-$4bn range Jeff Sprague, an analyst at Vertical Research Partners, said the deal was positive, but would not make a dramatic difference to GE's valuation. "It's very positive that they are streamlining the portfolio and returning cash to investors," he said. But it really doesn't change the earnings outlook. The large buyback programme follows sustained under-performance by GE's shares since 2008. At Tuesday's close of $22.58, GE's shares were down 34 per cent in five years, compared to a 24 per cent rise for United Technologies Since the start of February, Michael Dell and Silver Lake Partners have launched a $24.4bn buyout bid for Dell, and Liberty Global has offered $23.3bn for Virgin Media. So-called TMT deals for the year to date will top $101bn, the biggest start to the year since 2000, the height of the dotcom boom, according to Dealogic. Comcast acted now because NBCU was, in effect, getting more expensive, people close to the company said. The original agreement for it to buy out GE valued NBCU at about $30bn but the price for the outsstanding stake was based on NBCU's performance, and the price was going up as the business grew. "I think back to my dad starting Comcast in 1963 and where we are today with Comcast NBC Universal," Comcast's chairman and chief executive Brian Roberts told CNBC. We're very proud and excited. The deal will allow GE to increase its return to shareholders in 2013, and to invest further in its industrial business, said its chairman and chief executive, Jeff Immelt. "We are very pleased with the investment we have made in NBCUniversal, which generated a return of 14 per cent over more than two decades," he said. Most of all, we enjoyed working with the great people of NBCUniversal. Comcast, which has already invested in Universal's theme parks and sports rights for NBC, has been emboldened in its bet on combining distribution and content by increasing revenues from areas such as subscription video on demand and advertisers" interest in reaching sports audiences. "It's not a big risk because we had so much cash on the balance sheet," Mr Roberts said. Comcast will use its $11.4bn of cash in the deal. It also generated $8bn of free cash flow last year, up 13 per cent on 2011, Mr Angelakis said. Comcast will fund the deal with $4bn of subsidiary senior unsecured notes issued to GE, $2bn of bank borrowings and $725m of subsidiary preferred stock. Comcast increased its dividend by 20 per cent and said it would repurchase $2bn of stock this year. Comcast stock was up 8 per cent in after-hours trading while GE stock was up more than 3 per cent. Morgan Stanley and Davis Polk & Wardwell advised Comcast. JPMorgan, Weil, Gotshal & Manges, Goldman Sachs, Centerview Partners, and CBRE advised GE.