AT&T appears to have found a buyer for its beleaguered DirecTV business.
ATT announced today it will establish a new company with the private equity firm TPG called New DirecTV that will oversee the video businesses of AT&T, DirecTV, U-verse and AT&T TV, the latter of which recently absorbed the company’s AT&T TV Now service. The deal, which was reported possibly to be announced this week, the new company is estimated to be $ 16.25 billion. AT&T will hold 70% of the business, while TPG will hold 30% of Nova 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 help pay its mountain of debt. It is not clear whether the deal will have any significant impact on the services that exist and operate now, but AT&T said the newly formed company “will continue to offer a competitive video service with the best content in its category”.
“This agreement aligns with our investment and operational focus on connectivity and content, and the strategic businesses that are essential to the growth of our customer relationships in 5G wireless, fiber and HBO Max,” said AT&T chief John Stankey in a demonstration. “And it supports our deliberate commitment to allocate capital to invest in growth areas, sustain the dividend at current levels, focus on debt reduction and restructure or monetize non-core assets.”
He added: “As the pay TV industry continues to evolve, forming a new entity with TPG to operate the U.S. video business separately provides the flexibility and dedicated management focus needed to continue to meet the needs of a base high quality customers and manage the business for profitability. “
Restructure or monetize non-essential assets, you say? I wonder how many more WarnerMedia streaming service sales a la Crunchyroll that we will read about in the future.
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