The merger of GE's NBC and Vivendi Universal would create an exceptional media conglomerate. This deal would bring it closer to the ranks of global titans like Walt Disney and Viacom.

The NBC and Vivendi merger has proved that the days of mega media mergers are not yet over. After acquiring Vivendi Universal, GE has proved those, who thought that it wanted to be out of the volatile media game, wrong. GE maintained for years that it did not want to be in production business. Now, what prompted GE to enter into a business it had never run before? It could be that it wanted to get a hold of new business or the desire to improve strategically for the long-term good of its shareholders. By entering into more volatile areas, GE is trying for consistent outperformance vis-à-vis the S&P 500 in terms of earnings growth and returns for its investors.

GE surprised the media world by signing a preliminary deal on September 2, 2003 to acquire Vivendi Universal. The combined company would have 2003 revenues of $13 bn, with holdings that include film and TV studios, theme park interests, cable channels like Sci-Fi, USA Network, and Bravo and the NBC Network. The deal would create a mega media merger worth more than US$40 bn and join the ranks of titans such as Disney and Viacom.

NBC fought a stiff battle and competed with media industry's biggest players like Liberty Media Corp., Hollywood's Metro-Goldwyn-Mayer, Inc., Paramount pictures and Media Group Viacom. Vivendi's Chief Executive Jean-Rene Fourtou opted for a merger with the General Electricowned NBC for approximately $14bn rather than a buyout by a consortium of investors led by Seagram's Edgar Bronfman Jr. in the hope of a better return and good management.

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