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MCA wins USA Networks
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September 22, 1997: 12:14 p.m. ET
Viacom agrees to sell its 50 percent stake to venture partner for $1.7B
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NEW YORK (CNNfn) - Viacom Inc. Monday agreed to sell its 50-percent interest in USA Networks for $1.7 billion to its joint venture partner, MCA Inc.'s Universal Studios, both companies said.
As part of the transaction, both companies have agreed to end all litigation related to the television network.
The legal wrangling began when the network's founding partners, Universal Studios and Paramount Communications, were bought in the early part of the decade by their current parent companies, Seagram and Viacom, respectively. USA Networks was founded as a distribution vehicle for programming created by both Hollywood studios.
In April 1996, Seagram alleged in a lawsuit that Viacom's other television networks violated the non-compete clause of the 1981 partnership agreement that established USA Networks.
Last May 15, Vice Chancellor Myron Steele of Delaware Chancery Court ruled that Viacom's other cable assets did, indeed, compete with USA Networks and called for the two parties to resolve their dispute.
Viacom plans to use proceeds of the transaction to reduce its debt load by about $1 billion. Viacom's debt stood at $10.7 billion at the end of June.
The transaction is expected to close in the fourth quarter.
-- Robert Liu
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USA Networks
Viacom
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