Seagram in Pact to Buy 80 Percent of MCA for $5.7 Billion
Apr. 09, 1995
LOS ANGELES (AP) _ Seagram Co., the Canadian distiller, said Sunday it has agreed to buy 80 percent of Hollywood studio operator MCA Inc. from Japan's Matsushita Electric Industrial Co. for $5.7 billion.
Seagram said in a statement that Matsushita, a consumer electronics firm, would keep the remaining 20 percent stake in MCA.
The deal had been expected following the announcement Thursday that Seagram had completed an agreement to sell most of its 24.2 percent stake in Du Pont Co. back to the chemical manufacturer for $8.8 billion.
Seagram's agreement to purchase the stake in MCA was approved by both companies' boards and signed by Yoichi Morishita, president of Matsushita, and Edgar Bronfman Jr., president and chief executive of Seagram.
The transaction, which values MCA at more than $7.1 billion in total, is expected to close in June.
Montreal-based Seagram, controlled by the wealthy Bronfman family, already owns 15 percent of Time Warner Inc. and has long wanted to gain a prominent place in the entertainment and telecommunications businesses.
Reports that a sale of MCA was imminent had swirled for more than a week and on Friday the companies confirmed publicly talks were under way.
The bargaining, however, had gone on without Matsushita informing the top executives who have run MCA for years, president Sidney J. Sheinberg, 60, and chairman Lew Wasserman, 82.
Sheinberg and Wasserman have chafed under the control of Matsushita, a maker of VCRs, CD players, television sets and the like. Matsushita bought MCA for $6.6 billion in 1990, a deal that ranked among a number of prominent Japanese acquisitions in the United States.
MCA owns Universal Pictures, as well as Universal Studios theme parks, MCA Television, MCA Records and Geffen Records.
Universal Pictures has been responsible for blockbuster hits like ``Jurassic Park'' and ``E.T., The Extra-Terrestrial.'' MCA Television produces shows like ``Coach'' and ``Murder, She Wrote.''
MCA was still the talent agency Music Corp. of America when its founder, Jules Stein, made Wasserman president in 1946. It got into television production in the 1950s and bought the Universal Pictures movie studio in 1959, when Sheinberg joined the company.