DOW JONES NEWSWIRES
DirecTV Group Inc. (DTV) acquired an additional 18.9% stake in SKY Brasil from Globo Comunicacao E Participacoes SA, or Globo, for $604.8 million, part of a drive to expand in the U.S. and Latin America.
DirecTV's purchase of 178.8 million shares from Globo and its affiliates pushes its ownership stake to 93% from 74% and cuts Globo's share to 7% from 26%.
Unlike regionally based cable providers, DirecTV has benefited from higher activity in its Latin America business, though it soon will face more competition in the area. Brazilian regulators recently removed barriers to enter the pay-TV business and the country's largest landline phone company Tele Norte Leste Participacoes SA (TNLP4.BR, TNE), also known as Oi, has unveiled plans to launch an Internet-based TV service.
DirecTV added 380,000 net new customers in the third quarter, with most of the growth coming in Latin America. That segment accounted for 15% of its revenue in the period. The middle class in several of its regions, including Brazil, is growing, Bruce Churchill, president of the company's Latin American arm, said recently, with Brazil's market expected to double.
Globo had notified DirecTV in June that it intended to exercise its rights under a 2004 exchange agreement among SKY Brasil's then equity holders. The company has three more years to exchange the remaining 7% stake in SKY Brazil.
Shares were down 10 cents at $39.55 in recent trading.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com