AT&T is approaching an agreement to sell a substantial minority stake in its DirecTV, AT&T TV Now and U-Verse businesses to private equity firm TPG, according to people familiar with the matter.
A deal could be announced later this week, people said, who asked not to be named because the discussions are private.
The deal will value AT&T’s business at around $ 15 billion. AT&T acquired DirecTV in 2015 for $ 48.5 billion ($ 67 billion in debt).
AT&T has moved away from traditional pay TV in recent years as it has centered its media strategy around HBO Max. DirecTV, U-Verse and AT&T TV Now are based on a losing cable and linear network TV business million subscribers each year.
AT&T lost nearly 3 million video customers last year and took a $ 15.5 billion loss charge due to the company’s reevaluation of its home video business.
A sale will provide AT&T with additional cash to pay off its debt, which is about $ 150 billion and has declined consistently over the past year.
The hedge fund Elliott Management took an activist stake in AT&T in September 2019. In a letter to management, Elliott asked AT&T to focus its strategic operations while considering divesting non-core assets – including DirecTV. AT&T CEO John Stankey resisted a total sale.
TPG declined to comment. AT&T could not be reached immediately for comment.
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