Comcast-NBCU Deal Delayed Into 2011

The FCC is proposing regulatory conditions on the pending Comcast-NBC Universal merger, which is now expected to be completed in early 2011.
By Theresa McCabe ,

NEW YORK (

TheStreet

) --

Comcast

(CMCSA) - Get Report

doesn't expect to complete its joint venture with NBC Universal by the end of 2010 as it had originally projected.

The companies are still waiting on regulatory approval of the transaction, which calls for Comcast to acquire 51% of NBC Universal from the

General Electric

(GE) - Get Report

.

NBCU CEO Jeffrey Zucker sent a memo to employees Wednesday saying that the companies now expect the merger to be completed in January of the new year.

"We have made substantial progress this month with both the

Federal Communications Commission and the Department of Justice, and expect that we will get a 'green light' in January," Zucker said in the note.

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Wells Fargo analyst Marci Ryvicker believes that the delay is related to the potential concessions regarding online distribution.

"Applying program access rules to online video is extremely difficult given lack of precedence and 'market rates' for this type of content," Ryvicker said in a research note.

While she thinks there will be some restrictions, she doesn't believe Comcast will be "handcuffed" by the FCC's rules, and the company will still be able to explore different online distribution methods.

Ryvicker said the announcement is not unexpected and that it does not financially impact her assessment of the merger.

"We continue to favor Comcast and would buy on any weakness on today's news," she said.

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The deal must receive regulatory approval from both the FCC and the Department of Justice. Many speculate that the FCC is preparing to circulate an order for the merger as early as Thursday, and it will be finalized in January.

"The official close of the transaction would happen shortly after government approval," Zucker said in the memo. "Until then, of course, business continues as normal."

Shares of Comcast finished Wednesday's regular session down a nickel at $22.20, while GE's stock tacked on 16 cents to close at $18.06.

-- Written by Theresa McCabe in Boston.

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