UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of The Securities Exchange Act of 1934
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Date
of Report (Date of earliest event reported) December
3, 2009
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General
Electric Company
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(Exact
name of registrant as specified in its charter)
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New
York
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001-00035
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14-0689340
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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3135
Easton Turnpike, Fairfield, Connecticut
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06828-0001
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code (203)
373-2211
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(Former
name or former address, if changed since last
report.)
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Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instructions A.2. below):
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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(1)
Item
1.01. Entry into a Material Definitive Agreement.
On
December 3, 2009, General Electric Company (the “Company” or “GE”), NBC
Universal, Inc. (“NBCU”) and Comcast Corporation (“Comcast”) entered into a
Master Agreement pursuant to which they will form a joint
venture. The joint venture will consist of the businesses of
NBCU, including its cable networks, filmed entertainment, televised
entertainment, theme parks and unconsolidated investments, collectively valued
at $30 billion, and Comcast’s cable networks including E!, Versus and the Golf
Channel, ten regional sports networks and certain digital media properties,
collectively valued at $7.25 billion. In connection with the closing
of the transaction, NBCU will borrow approximately $9.1 billion from third party
lenders, and the proceeds of this debt financing will be distributed to the
Company. In addition, in connection with the closing of the
transaction, Comcast will make a payment of approximately $6.5 billion in cash
to the Company, subject to certain adjustments based on various events between
signing and closing. On December 3, 2009 the Company also entered into a Stock
Purchase Agreement (“Stock Purchase Agreement”) with Vivendi SA (“Vivendi”)
pursuant to which, at or prior to the closing of the Comcast joint venture, the
Company will acquire Vivendi’s 20% interest in NBCU for approximately $5.8
billion. As a result of the transactions, GE expects to realize approximately
$9.8 billion pre-tax in cash after the buyout of Vivendi’s 20% interest and
before retiring existing NBCU debt and paying transaction fees, and
approximately $8 billion in cash after retiring the debt and paying the fees.
The new venture initially will be 51% owned by Comcast and 49% owned by the
Company.
The
consummation of the transactions contemplated by the Master Agreement is subject
to receipt of various regulatory approvals, including clearance under the
Hart-Scott-Rodino Antitrust Improvements Act and approvals of the Federal
Communications Commission and certain international agencies. The transaction is
also subject to completion of the Company’s purchase of Vivendi’s 20% interest,
customary closing conditions and completion of the $9.1 billion financing
described above. The Master Agreement may be terminated by
either party: if the transaction has not closed by December 3, 2010 (subject to
up to two 90-day extensions, if necessary to obtain certain government
approvals); if any law or final, non-appealable order prohibits the closing of
the transaction; upon a material uncured breach by the other party of its
representations, warranties or covenants that would cause a closing condition
not to be satisfied; or, if after 30 days notice to the other party that the
closing conditions have been met, the closing has not occurred because of the
other party’s failure to comply with its obligation to close the
transaction.
Upon
consummation of the transactions contemplated by the Master Agreement, the
Company and Comcast will enter into an operating agreement for the joint venture
(“Operating Agreement”). Pursuant to the Operating Agreement, the
Company will be entitled to cause the joint venture to redeem one-half of its
interest after three and a half years and its remaining interest after seven
years. The joint venture’s obligation to complete those purchases
will be subject to the joint venture’s leverage ratio not exceeding 2.75X EBITDA
and the venture continuing to hold investment-grade status. If the joint venture
is not required to meet GE’s redemption requests because it does not meet these
conditions, Comcast will be required to backstop the joint venture’s
obligations, up to a maximum of $2.875 billion for the first
redemption and a total backstop obligation of $5.750 billion. Comcast
also has certain rights to purchase GE’s interest in the joint venture at
specified times. All such purchases would generally be at a 20% premium to the
then current public market value less 50% of the amount by which such value
exceeds the closing valuation.
(2)
Pursuant
to the Operating Agreement, the joint venture board of directors will initially
consist of three Comcast designees and two GE designees. GE’s
representation right will be reduced to one director if GE’s ownership interest
in the joint venture falls below 20%, and GE will lose its representation right
if GE’s ownership interest in the joint venture falls below 10%. The
board of directors will have certain approval rights, and board decisions will
be made by majority vote, except that GE will have veto rights with respect to
material expansion of the joint venture’s scope of business or purpose, a
liquidation or voluntary bankruptcy of the joint venture and certain
acquisitions, issuances or repurchases of equity, distributions to equity
holders, debt incurrences, loans made outside of the ordinary course of business
and tax related actions. These veto rights generally expire when the
Company’s ownership interest in the joint venture falls below 20%. The Operating
Agreement prohibits GE from transferring its ownership interest in the joint
venture for three and a half years and Comcast from transferring its ownership
interest for approximately four years. After these respective
periods, GE and Comcast will each have the right to sell its interest in the
joint venture and certain rights to request the registration of its shares for
sale in one or more public offerings, subject, in the case of GE, to Comcast’s
right to purchase the shares. In certain circumstances, if Comcast were to sell
its shares, GE would have the opportunity to participate in the sale, and in
some cases, Comcast would have the right to require GE to participate in the
sale.
As
discussed above, pursuant to the Stock Purchase Agreement between the Company
and Vivendi, the Company will purchase Vivendi’s 20% interest in
NBCU. Pursuant to the Stock Purchase Agreement, Vivendi has
irrevocably consented to the transactions contemplated by the Master
Agreement. In addition, pursuant to the Stock Purchase Agreement, if
the proposed Comcast transaction has not closed as of September 26, 2010, the
Company will purchase approximately 38% of Vivendi’s shares in NBCU (or
approximately 7.66% of all outstanding NBCU shares) for $2 billion in cash at a
price per share arrived at by dividing 90% of $5.8 billion by the total number
of NBCU shares held by Vivendi. On September 26, 2010, Vivendi’s right to
prevent a sale of NBCU to any other party will also terminate, except in certain
limited circumstances. On the date the Comcast transaction closes,
the Company will make a total payment of $3.8 billion which amount
includes (i) a payment to purchase the remaining 62% of Vivendi's shares in
NBCU (or approximately 12.34% of all outstanding NBCU shares) for a
per share purchase price arrived at by dividing $5.8 billion by the total number
of NBCU shares originally held by Vivendi, plus (ii) a payment equal to the 10%
discount from the first purchase. If the Comcast transaction is
terminated, then Vivendi will have a right exercisable during a fifteen-day
period beginning on the later of the termination date of the agreement and
January 1, 2011 to require an IPO. NBCU would be required to complete
the IPO within five months of receiving notice requesting the IPO from
Vivendi.
NBCU has
obtained a commitment pursuant to a commitment letter dated December 3, 2009
from J.P. Morgan Securities Inc., Goldman Sachs Credit Partners L.P., Morgan
Stanley Senior Funding, Inc., Banc of America Securities LLC and Citigroup
Global Markets Inc. to provide the entire amount of the $9.1 billion financing
described above (plus a $750.0 million revolving credit facility), subject to
certain conditions, including completion of documentation, receipt of an
investment grade rating, compliance with a consolidated leverage ratio and the
absence of a material adverse change.
(3)
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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General
Electric Company
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(Registrant)
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Date:
December 3, 2009
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/s/
Jamie S. Miller
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Jamie
S. Miller
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Vice
President and Controller
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(4)