Comcast deal will help GE with core biz
The Comcast Center in Philadelphia, and an NBC sign at its studios in Burbank, Calif.
TEXT OF STORY
Kai Ryssdal: The big media deal that's been bubbling around for months is now official. Comcast, the cable giant, is going to buy a controlling chunk of NBC Universal from General Electric. Much has been written and said about what this deal means for NBC. And about what it means for Comcast. Not so much about what it means for GE. Marketplace's Jeremy Hobson has that story from New York.
JEREMY HOBSON: When I think of GE, I think of the lit-up red letters on the top of 30 Rockefeller Plaza, just a few blocks from our Manhattan office.
But GE analyst Steven Winoker at Sanford Bernstein says that image will no longer define the company.
STEVEN WINOKER: The average American's going to think about GE as a power and transportation infrastructure equipment company as they did if you go back long enough. It will no longer be 30 Rock, for better or for worse.
NBC Universal generated less than 10 percent of GE's annual revenue. The sale will net GE about $8 billion. Add that to other sell-offs, and the company expects to have a pretty sizable amount of money in its pocket next year.
It'll need it first and foremost for GE Capital, its troubled lending division. But after that's dealt with, GE can start focusing on the core parts of its business.
Morningstar analyst Daniel Holland:
DANIEL HOLLAND: It really helps them beef up and bolster their presence, they can go and acquire other companies, or they can just, you know, focus more on organic growth and doing more research and development, things like that.
The sooner the better, says Steven Winoker. GE is hoping to take advantage of stimulus spending not just here in the U.S. but in other countries as well.
WINOKER: Infrastructure spending globally, what's going on in China in terms of energy needs and transportation needs and health care needs.
Winoker says GE may sell off a few more parts of its business before it starts expanding. He expects the action to start in the middle of next year.
In New York, I'm Jeremy Hobson for Marketplace.