AT&T appears to have found a buyer for its beleaguered DirecTV business.
AT&T announced today that it will form a new company with private equity firm TPG called New DirecTV, which will oversee AT & T’s video company DirecTV, U-verse and AT&T TV, the latter of which recently absorbed the company’s AT&T TV Now service. The deal, that was reported that may be announced this week, would value the new company at $ 16.25 billion. AT&T will own 70% of the company, while TPG 30% from New DirecTV.
The $ 7.8 billion deal is expected to close in the second half of 2021, and AT&T said it will use that money to build its mountain of debtIt’s unclear whether the deal will have a significant impact on the services as they now exist and operate, but AT&T said the newly formed company will “continue to provide a competitive video service with best-in-class content.”
“This agreement is in line with our investment and operational focus on connectivity and content, and the strategic companies that are essential to expanding our customer relationships through 5G wireless, fiber and HBO Max,” said AT&T chief John Stankey in a statement. pronunciation“And it supports our deliberate capital allocation commitment to invest in growth areas, maintain dividends at current levels, focus on debt reduction and restructuring or monetize non-core assets.”
He added, “As the pay-TV industry continues to evolve, forming a new entity with TPG to operate the US video business separately provides the flexibility and dedicated management focus needed to continue meeting the needs of a high-quality customer base and management of the business for profitability. “
Restructure or monetize non-core assets, you say? I wonder how much WarnerMedia streaming service fire sales a la Crunchyroll that we’ll read about in the future.
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