RCA, Thornton Bradshaw, GE discussed on TechStuff
He switched and saved a bunch. So it all worked out. Aren't roped in nineteen eighty-five. This was a monumental year. Because it was the year when GE would make the decision to acquire RCA, although that acquisition wouldn't be complete until nineteen Eighty-six and the deal was for six point four billion dollars. Now, this this meant that this was the largest ever acquisition or merger business deal. That didn't involve an oil company and the history of business at this point is since been clips, obviously, but in one thousand nine hundred six a six point four billion dollar merger between two companies that were not oil companies that was a record breaking moment. And it came in a time when RCA chairman Thornton Bradshaw and RCA CEO Robert r Frederick had managed to get RCA on a profitable track. They had managed to sell off these businesses most of them. Anyway, that didn't make any sense to our. As core business. They're able to refocus our CA they were able to make it profitable NBC was doing incredibly well toward nine hundred eighty five and had started to win awards for its programming and starting to to get more viewership things were really looking great. And on November six nine thousand nine hundred five after having a meeting with the board of directors Bradshaw would go off and meet with a guy named John F Welsh junior who was the chairman and CEO of GE at that time. Now, if you've been listening to all of these episodes, you might remember GE was one of the founding partners for RCA. In fact, it was the principal partner way back in nineteen nineteen GE owned most of RCA for many of the early years until it was forced to divest itself because the US government said you can't do that anymore. However now are in the eighties. This is the Reagan era when the US government was less concerned about things like. Nop elise. And there was a very Lhasa fair approach to corporate politics in corporate acquisitions, this was the era of hostile takeovers. But you might wonder if our RC was doing so, well, why was Bradshaw? Willing to entertain this deal. If RCA is actually on the right track. Why go with an acquisition deal in the first place. No part of the problem. The Bradshaw was the culture at the time. Because like I said, this was the era of hostile takeovers. So there was always a fear that someone would end up creating an environment where they would approach shareholders with the deal that was too good to refuse. And then take over the company the only that but RCA had two billion dollars in cash because it had divested itself of all these other companies and also found that it had been overpaying the pension fund. So there was actually extra cash leftover because the pension fund had more money in it than it needed. It also meant that if a company came in out or some investors came in and a. A huge amount of money to acquire RCA. They could done leverage that two billion dollars in cash to pay off any debts and more problematic than that parts of RCA were really really valuable. In fact, it was thought that if you were to divide up our CA into different pieces, you can make more money selling those individual pieces off to different companies than you would if you just operated our CA as a full company in itself. In fact, Bradshaw had even looked at offloading. Some more of our CA at one point he had looked at the possibility of selling NBC to Disney, but eventually Bradshaw realized that RCA really needed in B C the revenue NBC was bringing in was too important to RCA's business. So he couldn't really afford to divest itself. So the two companies GE and RCA happened to have some divisions and departments that clearly complemented one another our. She had done a lot of work for the navy and G had done a lot of work for the army, so bringing the two companies together would create a more unified approach for military contracts that kind of thing so after some debate RCA's board met and agreed to GE's terms..