N&amp;VCACS11-5PPT

# N&amp;amp;VCACS11-5PPT - Vivendi General Electric Value of...

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NBC & VUE Combine Assets in Forming NBC Universal Joint Venture

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Methodology Step 1: Estimate total value of joint venture Step 2: Estimate value of assets contributed by each partner Step 3: Determine form of payment Step 4: Determine ownership distribution
Step 1: Value Combined Assets of Joint Venture 1. \$3 billion EBITDA (EBITDA of contributed assets) 2. GE contributes \$2 billion of EBITDA; VUE contributes \$1 billion of EBITDA 3. 14 (Comparable entertainment company multiple) 4. Relative valuation method: \$3 billion x 14 = \$42 Billion

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Step 2: Calculate Value of Each Partner’s Contribution to the Joint Venture \$14 Billion (1/3 of \$42 Billion) \$28 Billion (2/3 of \$42 Billion)

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Unformatted text preview: Vivendi General Electric Value of Combined GE and VUE Assets = \$42 billion Step 3: Form of Payment to Vivendi 1. \$4.0 billion (GE stock) 2. \$1.6 Billion (Assumed Vivendi debt) 3. \$8.4 billion (Value of Vivendis equity position in NBC Universal) \$14.0 billion (Purchase price paid to Vivendi for VUE assets) Step 4: Determining Ownership Distribution At Closing 1. Vivendi chooses to receive cash infusion at closing = \$5.6 billion (i.e., \$4 billion in cash in lieu of GE stock + \$1.6 billion in assumed Vivendi debt) 2. Vivendis % ownership in NBC Universal (\$14B - \$5.6B)/\$42B = \$8.4B/\$42B = 20% 1. At closing: GE ownership = 80% Vivendi = 20%...
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## N&amp;amp;VCACS11-5PPT - Vivendi General Electric Value of...

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