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Satellite Giant to Buy GE Unit for $5 Billion

March 28, 2001|Bloomberg News

Societe Europeenne des Satellites plans to buy General Electric Co.'s satellite unit for about $5 billion in cash and stock to become the largest satellite broadcaster, people familiar with the situation said.

General Electric would receive about $2.7 billion in cash and the rest in stock for GE American Communications, known as GE Americom, the people said. General Electric declined to comment. Societe, owner of Europe's Astra satellite network, might sell stock in the U.S. to fund the purchase, analysts said. Societe spokesman Yves Feltes said the company would prefer to add a satellite company to its array of 11 satellites because building a bigger network "would be too costly."

GE Americom's 15 satellites offer access to every U.S. cable-television system. General Electric would rather own a stake in the biggest satellite broadcaster, analysts said, because it would have to spend too much to expand globally.

Princeton, N.J.-based GE Americom is owned by General Electric's GE Capital unit. General Electric also owns the NBC television network.

Societe, based in Luxembourg, transmits more than 1,000 television and radio channels to 80 million households in Europe.

The combined company would have annual sales of more than $1.2 billion, analysts said. GE will get 25% of Societe and three board seats with no management role, the people familiar with the situation said.

Shares of Fairfield, Conn.-based GE rose $1.68 to close at $41.91 on the New York Stock Exchange.

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