Sony to buy about 5% of Illinois maker of set-top boxes $188 million investment in NextLevel Systems



Sony Corp. plans to buy about 5 percent of NextLevel Systems Inc. -- a Chicago-based maker of set-top boxes that process cable television signals for display on TV sets -- for about $188 million, the firms said yesterday.

Sony would pay about $25 each for 7.5 million new shares of NextLevel, which next month changes its name back to General Instrument Corp. That is a 37 percent premium over NextLevel's closing price of $18.18 last week. The firm's shares closed yesterday at $19.75, up $1.57.

The deal may pave the way for consumer sales of set-top boxes under the Sony name in the future, according to a spokesman for NextLevel.

The cable industry hopes that sometime in the future consumers will have the option of buying their own digital conversion boxes instead of being limited to using boxes supplied by their cable TV operator.

Besides giving NextLevel help in the consumer electronics market, the Sony deal could include incorporating NextLevel's technology with Sony home products such as digital video disc players so that one box could serve several functions, said Dick Badler, a spokesman for NextLevel.

"There are other possible aspects to our alliance," said Badler. "If we want to outsource some manufacturing, for example, Sony could become a preferred source for that."

Last month, NextLevel said it had won contracts to supply digital set-top boxes to nine cable TV operators in a deal worth $4.5 billion over the next three to five years. The firm said that the firms, which include Tele-Communications Inc., Time Warner Inc., Comcast Corp. and Cox Communications Inc. will get the right to buy 16 percent of NextLevel in newly issued stock as part of the transaction.

NextLevel plans to move its corporate headquarters from Chicago to Horsham, Pa., later this year.

Pub Date: 1/06/98

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