Comcast’s (NASDAQ: CMCSA) majority ownership in NBCUniversal did wonders for its share price last year. Now that the company has bought out the remaining stake, the stock has risen to new heights.
Comcast is shelling out $16.7 billion to buy out the 49% stake owned by General Electric (NYSE: GE). The acquisition gives Comcast full ownership of NBCUniversal.
So far, Wall Street loves the move. Comcast shares are up 3.5% in late-day trading, at one point rising to $42 a share. Right now, the stock sits at $40.30 per share – still a new all-time high.
Investors have every reason to love the move. NBCUniversal has been a boon for the nation’s largest cable operator. Comcast shares have shot up 67% in the two years since the company bought a 51% stake in the diversified entertainment company.
In addition to NBC network, NBCUniversal operates a number of popular cable channels including the USA network, Bravo, CNBC, MSNBC and the NBC Sports Network. NBC aired both Super Bowl 46 and the London Olympics last year – two of the most watched events in U.S. television history.
NBCUniversal has certainly been a cash cow for Comcast. Now that it will own a full stake in the media company, Comcast should benefit even more.
Despite losing its Comcast stake, General Electric is making out pretty good in this deal. GE is making $18.1 billion from its NBCUniversal sale – a price tag that includes the $1.4 billion it’s getting for selling Comcast the signature NBC studios at 30 Rockefeller Plaza (site of Saturday Night Live and the now-defunct show 30 Rock) in New York.
GE has already said it plans to use that money to buy back shares and increase its dividend from an already generous 3.4% yield. As a result, GE shares also hit a new 52-week high today, vaulting 3.5% as of 3:30 p.m. eastern time.