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Comcast Deal Faces Hurdles

NEW YORK - Comcast and General Electric unveiled one of the largest and most controversial media mergers in years on Thursday, one that would give the No. 1 cable and broadband provider a controlling stake in NBC Universal.

Executives say the deal, which values NBC Universal at $30 billion, will accelerate the growth of digital technologies that enable people to watch news and entertainment whenever and wherever they want.

"There's a transition happening from physical to electronic delivery in all media, and this will play a big role in helping to make that really good for consumers," Comcast CEO Brian Roberts says.

He has long yearned to own more cable channels. They generate steady revenue from the monthly fees paid by cable and satellite companies. He says this deal provides them at a good price.

But consumer groups vow to vigorously oppose the deal. It would give Comcast control over a new company that would be run as a joint venture with powerful assets in television and movie production, theme parks and the Internet. NBC Universal's channels include NBC, Telemundo, USA Network, Bravo, CNBC and Oxygen. Its franchises include The Tonight Show, Meet the Press and Saturday Night Live.

Comcast will contribute its channels including E! Entertainment Television, Versus, 10 regional sports networks and the Golf Channel.

"No one entity should have control over such a large audience," says Media Access Project CEO Andrew Jay Schwartzman.

It could take about a year for federal antitrust officials and the Federal Communications Commission to decide whether to approve the transaction.

Comcast would control 51% and three of five board seats after contributing its channels, valued at $7.25 billion and paying $6.5 billion to GE. NBC Universal's Jeff Zucker would run the operation, reporting to Comcast COO Stephen Burke.

Industrial giant GE also would collect $9.1 billion from NBC Universal, which will borrow the cash from third-party lenders. GE will pay $5.8 billion to Vivendi for its 20% stake in NBC Universal.

GE could sell half of its 49% share in the venture to Comcast after 3 1/2 years and sell the remainder after seven years. "They're probably unhappy with the performance" of NBC, which is No. 4 in prime time, says former NBC Universal CEO Bob Wright. "But the rest of the business is very good."

Comcast shares jumped 6.5% to $15.91 on Thursday after the company said it will increase its dividend and complete a $3.6 billion share repurchase over the next three years. GE fell 7 cents to $16.

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