The recent announcement of the merger between America OnLine (AOL) and Time Warner has returned interest to the issue of mergers and acquisitions and whether mergers are always in the best interest of the public. The acquisition of Time Warner by AOL is thought to provide AOL with much-needed content, and access to Time Warner's cable systems throughout the country. Time Warner, on the other hand, gains access to AOL's Internet portal. Such synergies are generally behind mergers and acquisitions, but few acquisitions have caused the level of consternation and concern as the acquisition of RCA by General Electric in the early 1980s. At issue was not the top-level brands (General Electric and RCA), but the fact that RCA already owned NBC, which had a formidable news organization that helped shape public opinion. This research examines the acquisition of RCA by General Electric, and considers the effects of the acquisition on NBC and specifically the news organization at NBC.
When GE acquired RCA in 1986, it was a continuation--after a long break--in the joint operation of the two companies. General Electric helped to create the Radio Corporation of America in 1919 under the influence of Franklin Roosevelt (then Assistant Secretary of the Navy) to help ensure that the United States maintained a leadership role in communications. General Electric was forced to spin off its RCA holdings in 1932, but maintained a significant stock interest in the company well into the twentieth century (Alexander, 1985, p. 48).
The results of the acquisition have been mixed. GE re introduced the RCA appliance product line in the early 1990s, but then discontinued it when it failed to gain acceptance. RCA does, however, continue to be a dominant player in the manufacture of televisions.
More critical to GE's overall strategy is its goal to be the number one or number two company within the various industries in which it participates ("The Ho...