General Electric Co., in the largest non-oil merger in...

Dec. 11, 1985
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NEW YORK -- General Electric Co., in the largest non-oil merger in U.S. corporate history, will takeover RCA Corp. in a cash deal valued at $6.28 billion, or $66.50 a share of RCA common stock.

The merger, which will create a company with combined sales of roughly $35.8 billion, was announced late Wednesday by John F. Welch, Jr., chairman and chief executive of GE; Thornton F. Bradshaw, chairman of RCA; and Robert R. Frederick, RCA president and chief executive.

In a joint statement, the three executives said the merger is 'an excellent strategic opportunity for both companies that will help America's competitiveness in world markets.

'We are creating a company that will successfullly compete with anyone, anywhere in every market we serve.'

The announcement followed a flurry of activity surrounding RCA stock on the New York Stock Exchange. RCA was the second most active issue and the session's biggest winner, jumping $10.75 to $63.50 on rumors that a major announcement was pending. GE was up 25 cents to $67.875.

The boards of directors of both companies have approved the merger agreement that will require approval by stockholders of RCA and a review by various regulatory agencies, including the Federal Communications Commission.

Both companies expect the deal to be closed sometime in 1986.

The marriage of GE and RCA will bring together two of the nation's leading consumer products companies. They both also are major defense contractors and observers said some potential overlap could bring consolidation.

RCA designs and engineers a variety of military and space electronics systems, that includes work for NASA. GE is one of the nation's largest defense contractors and aerospace manufacturers, including jet engines.

GE, with earnings of $2.28 billion, or $5.03 a share in 1984, on sales of $26.8 billion, is ranked ninth in the Fortune 500 largest U.S. industrial companies.

RCA, with revenues of $8.98 billion in 1984, has been divesting itself of various assets since Bradshaw assumed the chairmanship of the then-troubled company in 1981.

NBC, its broadcast subsidiary, which owns five television stations as well as AM and FM radio stations, has been doing well. RCA's electronics division makes color and black-and-wide television receivers, video cassette recorders and cameras. Since GE got out of the television business, RCA is the dominant U.S. firm in this area.

GE has been doing some divesting of its own. Among recent actions, it sold its small consumer appliance division to Black & Decker, although it remains in the major appliance field that it dominates.

As part of Bradshaw's divestment program for RCA it sold Hertz Corp., the rental car firm, to UAL Inc., the parent company of United Airlines, for $575 million earlier this year.

Two years ago, Manufacturers Hanover Trust paid RCA $1.5 billion for its CIT Financial Services subsidiary.

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