Announcement of Seagram-MCA Deal Expected Today

Barring any unforeseen glitches, liquor giant Seagram Co. will announce its 80% acquisition of MCA Inc. from Japanese electronics titan Matsushita Electric Industrial this afternoon for about $5.6 billion, according to sources close to the transaction.

Seagram Chief Executive Edgar M. Bronfman Jr. was in New York on Saturday, sources said, and expects to be in Los Angeles today for the announcement.

Speculation was that Bronfman would be meeting either today or in the next few days with MCA’s executive team, led by Chairman Lew R. Wasserman and President Sidney J. Sheinberg.

Sources close to the negotiations characterized the transaction as “a done deal” with only a few routine, last-minute details being ironed out. On Friday, Seagram and Matsushita for the first time confirmed that they have even been talking about MCA.

Osaka-based Matsushita has owned MCA since 1990. MCA is the parent of Universal Pictures, the Universal Studios theme parks, Geffen Records and MCA Music.

Under Matsushita’s ownership, the Universal City-based entertainment conglomerate has released such films as “Jurassic Park,” “Schindler’s List” and “The Flintstones,” as well as music from such artists as Nirvana and Meat Loaf.

Matsushita and Seagram retained a small army of public relations officials to work through the weekend to prepare the announcement, which is being timed to coincide with the opening of the Japanese stock market Monday.

The announcement will cap a week of nonstop negotiations and frenzied media speculation about the deal. Initial reports all had the transaction pegged at more than $7 billion, but sources Friday corrected the number to $5.6 billion.

That means the deal is much worse for Matsushita than originally thought. At $5.6 billion for 80% of the company, MCA is now valued at about $7 billion, just a shade more than the $6.6 billion Matsushita paid when it bought MCA five years ago.

Since 1990, however, the yen has strengthened so much against the dollar that Matsushita would need to get more than $10 billion for MCA to equal the $6.6 billion it originally invested.

Matsushita, which makes consumer electronics products under such brand names as Panasonic and Technics, originally bought MCA with the idea of seamlessly blending its electronics operations with the entertainment business. Instead, the five-year relationship was marked by constant rifts with MCA management.

The deal fulfills Bronfman’s long-held desire to enter the entertainment business. Seagram makes such products as whiskey and Tropicana orange juice.