The Beginning of the End for the Original Entertainment Conglomerate
RCA began its life as an offshoot of General Electric in 1919. On Dec. 11, 1985, the long-independent entertainment company finally returned to the fold after GE acquired its former spinoff for $6.3 billion.
The acquisition, one of the largest non-energy deals of the 1980s, brought an entertainment conglomerate with 1984 net income of $246 million on revenue of $10.1 billion into the fold of one of the world's largest manufacturing concerns. By this point, RCA was not only one of the largest radio and television broadcasters in the country, but it was also one of the larger electronics manufacturers as well. The combined company produced revenue of more than $38 billion and held assets worth more than $32 billion. The augmented GE's revenue would have made it the seventh-largest industrial corporation in the country -- a little smaller than fellow Dow Jones Industrial Average component IBM but larger than chemically focused Dow component Dupont .
GE wound up divesting itself of many RCA assets soon after the merger's completion. The only recognizable part of RCA that GE chose to hold on to for any appreciable length of time was NBC. This broadcaster is now wholly owned by Comcast after the media company bought the remaining 49% of NBCUniversal that it didn't already own in early 2013. GE is thus ultimately responsible for both the birth of RCA and its eventual death by degrees of divestiture.
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The article The Beginning of the End for the Original Entertainment Conglomerate originally appeared on Fool.com.Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology.The Motley Fool owns shares of General Electric Company and International Business Machines. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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