NBCU to buy 26% stake in NDTV for $150 million

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New Delhi, Jan 22: General Electric Co’s (GE) broadcasting unit, NBC Universal (NBCU) will buy 26% stake in the entertainment division of Prannoy Roy-promoted New Delhi Television (NDTV) for $150 million. The company will also have an option to up the stake to 50% over the next two years.

NDTV Networks is a subsidiary holding company of Prannoy Roy’s overall group company under which all of the company’s initiatives not including the news channels are housed. In effect it means that NBCU has bought stake in the entertainment arm (NDTV Imagine), lifestyle channels (Good Times), Convergence, Ngen and NDTV Labs. “They have not bought any part of the news channels,” the official said.

As per the deal, NDTV will continue to handle all day to day operations of the group while NBCU will have a say in all strategic and business decisions of the company. New areas to explore and new channels apart from investment opportunities will have to go through NBCU, an NDTV official said.

As part of stage two of the alliance but not part of the immediate deal, the two new partners would also discuss other growth options in the media and entertainment space. “The new partners are in the process of discussing co-production of content and in the near future NBCU may join NDTV to launch the former’s channels in the country,” the company official said.

Last April Jeff Zucker chief executive NBC Universal said he wanted to more than double the size of the international operations of NBC in three years’ time. NBCU is 80% owned by General Electric and 20% by Vivendi.

NDTV Networks had last year raised $120 million through private equity placement that reportedly included Lehman Brothers, Goldman Sachs, Credit Suisse and Velocity Interactive Group (earlier called ComVentures) for a nearly 24% stake. Of the $120 million already raised, NDTV Imagine is expected to consume $106 million. The proposed transaction is expected to be finalised once shareholder and regulatory approvals are in place.

This is the third deal of a major US media conglomerate taking a stake in a TV network in India recently. Viacom has a 50:50 JV with Network18 in Viacom 18 and Disney has picked up a 14.85% stake in UTV.

NDTV Imagine, launched on Monday, is a Hindi entertainment channel, competing in a segment dominated by News Corp’s Star and Zee Entertainment Networks.