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SEAGRAM TO BUY 80% OF MCA FOR $5.7 BILLION; MATSUSHITA TO REMAIN AS MINORITY PARTNER.



LOS ANGELES--(BUSINESS WIRE)--April 9, 1995--The Seagram Company Ltd. (NYSE NYSE

See: New York Stock Exchange
:VO) and Matsushita Electric Industrial Co., Ltd. (NYSE:MC) today announced that Seagram has agreed to purchase an 80 percent interest in MCA MCA
 in full Music Corporation of America

Entertainment conglomerate. It was founded in Chicago in 1924 by Jules Stein as a talent agency. In the 1960s it bought Decca Records and Universal Pictures, and today it produces films, music, and television shows.
 INC inc - /ink/ increment, i.e. increase by one. Especially used by assembly programmers, as many assembly languages have an "inc" mnemonic.

Antonym: dec.
. for $5.704 billion in cash.

Matsushita will retain a 20 percent interest in MCA. The transaction, which is expected to close in June, values MCA at $7.13 billion which represents a multiple of nearly 1.5 times 1994 revenues and approximately 15 times estimated 1994 earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
:EBITDA = Operating Revenue – Operating Expenses + Other Revenue
 (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ).

The agreement was signed by Yoichi Morishita, president of Matsushita, and Edgar Bronfman Two persons are named Edgar Bronfman (father and son). They are the son and grandson of Seagram founder Samuel Bronfman:
  • Edgar Miles Bronfman (born 1929), a Jewish-Canadian businessman and former long-time president of the World Jewish Congress
  • Edgar Bronfman, Jr.
, Jr., president and chief executive officer of Seagram, upon approval by the boards of directors of both companies.

MCA's principal assets include Universal Pictures, MCA Television Group, MCA Music Entertainment Group, Putnam Publishing Group, Universal Studios theme park in Hollywood and a half interest in the Universal Studios theme park in Florida, and interests of approximately 50 percent in USA Network USA Network is a popular American cable television network with about 89 million household subscribers as of 2005. The network shows a variety of original and second-run programming, from syndicated TV series to edited movies.  and over 40 percent in the Cineplex Odeon chain of theaters.

Universal's motion picture hits include "Jurassic Park
For the feature film, see Jurassic Park (film), for other uses see Jurassic Park (disambiguation)


Jurassic Park is a techno-thriller novel written by Michael Crichton that was published in 1990.
," "The Flintstones," "Scent of a Woman" and "Schindler's List." MCA's music properties own the rights to over 150,000 songs and feature many of the greatest recording artists in the world. Its television companies are leading suppliers of prime time network programming, including "Murder She Wrote." Authors published by MCA companies include Tom Clancy For the member of the Irish folk band The Clancy Brothers, see Tom Clancy (singer) and for the American Celticist, see Thomas Owen Clancy.

Thomas Leo Clancy Jr. (born April 12 1947), better known as Tom Clancy
, Robin Cook and Dean Koontz Dean Ray Koontz (born July 9, 1945 in Everett, Pennsylvania), also known under a number of pseudonyms, including Leigh Nichols, is an American writer.

He is best-known for writing many successful novels that could broadly be described as suspense thrillers, but which
.

MCA, which is based in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , had estimated revenues of approximately $4.8 billion in 1994. It will be virtually free of debt when the transaction is completed. Matsushita purchased MCA in 1990 for $6.13 billion, at which time the company had debt of $1 billion.

"Our investment in MCA continues the transformation of Seagram," said Edgar Bronfman, Jr., president and chief executive officer of Seagram. "We are committed to the global consumer economy and to the ownership of leading brands and franchises within that economy. We believe that the entertainment sector has unusually high future growth and profit potential. Our investment in MCA offers us a unique opportunity to participate in that potential through control of one of the very few major content providers. MCA combines powerful brands, superior production and distribution capability, and very capable people. Seagram is a conservative, long-term investor Long-term investor

A person who makes investments for a period of at least five years in order to finance his or her long-term goals.
. Our 14-year investment in DuPont produced good returns for Seagram; we believe MCA provides our shareholders with superior prospects for the decades to come."

"We're honored to be entering into this partnership with Matsushita, an outstanding multi-national company driven by an enduring vision of enriching people's lives and culture," Mr. Bronfman continued. "We expect Matsushita to continue to make important contributions to MCA's future through its ownership interest and its representation on the MCA board of directors."

"I want to express my respect and admiration to Lew Wasserman Lew Wasserman (March 15, 1913 - June 3, 2002) was a Hollywood agent and studio executive credited with first creating and then taking apart the studio system in a career spanning more than six decades. , one of MCA's founders, and his long-time colleague Sidney Sheinberg," Mr. Bronfman said. "Without them, the MCA we value so highly would simply not exist. I look forward to working with them to shape the future direction of MCA."

Yoichi Morishita, president of Matsushita said, "We are very pleased with our new majority partner and with the speed, trust and mutual confidence that characterized the negotiations." Mr. Morishita further said, "The entertainment industry is a very important part of the American economy and we expect MCA will continue to play a leading role, not only in the U.S., but throughout the world. Seagram also shares Matsushita's corporate philosophy of quality, customer satisfaction and social responsibility. We believe our partnership will take MCA to a greater success in the years ahead."

"MCA has grown during the five years of our ownership, and together we have contributed to the significant advancement of digital video standards," Mr. Morishita continued. "But the core business of Matsushita is electronics, which is undergoing a major change as the multimedia age approaches with the advancement of digital communications Transmitting text, voice and video in binary form. See communications.  technologies on a global scale. This transaction positions us to deploy our resources in such growth areas as multimedia and key device technologies and global business expansion, while continuing to participate in the entertainment business through our retained interest Retained interest (also colloquially known as a payout penalty) is future, currently unpaid, interest that some lenders add to the remaining principal of a loan to determine a payout figure in the event that the loan is terminated before the completion of the original term.  in MCA. We look forward to the continuing contribution of our business and technological expertise to MCA."

Seagram said financing for the transaction would be provided by a portion of the $7.7 billion net after tax proceeds of the recent redemption of Seagram's shares of DuPont.

Seagram, headquartered in Montreal, is a leading global producer and marketer of distilled spirits, wines, fruit juices, coolers and mixers and sells its brands in more than 150 countries and territories. Affiliates and joint ventures in 41 countries and territories comprise the largest distribution system in the spirits and wine industry. Seagram manages its worldwide beverage operations through two major business units -- The Seagram Spirits And Wine Group and The Seagram Beverage Group -- and two U.S.-based specialized, premium wine operations, The Seagram Classics Wine Company and Seagram Chateau & Estate Wines Company. Its consumer brands include Chivas Regal, Royal Salute and The Glenlivet Scotch Whiskies, Crown Royal and Seagram's V.O. Canadian Whiskies, Seagram's 7 Crown Blended Whiskey, Four Roses Bourbon, Seagram's Extra Dry Gin, Martell Cognacs, Mumm and Perrier Jouet Champagnes, Sandeman Ports and Sherries, Sterling Vineyards and Barton & Guestier Wines. Seagram also distributes Absolut Vodka in many world markets.

Matsushita, founded in 1918 by Konosuke Matsushita, is one of the world's leading manufacturers of consumer and industrial electronic and electric products, which it markets under the Panasonic, Technics tech·nic  
n.
1. technics (used with a sing. or pl. verb) The theory, principles, or study of an art or a process.

2. technics (used with a pl. verb) Technical details, rules, or methods.

3.
, Quasar and National brand names. Based in Osaka, the company employs more than 250,000 people worldwide and markets its products in more than 160 countries. During the fiscal year ended March 31, 1994, Matsushita reported worldwide revenues of $64.3 billion.

CONTACT: Seagram

Chris Tofalli, 212/572-1118

or

James Abernathy, 212/371-5999
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Publication:Business Wire
Date:Apr 9, 1995
Words:977
Previous Article:Sony Defines the Digital Future of Television Broadcasting; Sony's "Facility of the Future" Provides First All-Digital, End-to-End Solution for...
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