AT&T to Spin Off DirecTV Unit in Deal With TPG -- Update
February 25 2021 - 5:09PM
Dow Jones News
By Drew FitzGerald
AT&T Inc. agreed to join its pay-TV unit with private-equity
firm TPG in a deal that would form a new business valued around
$16.25 billion, including debt, pulling the telecom giant back from
a costly wager on entertainment.
The transaction would move the DirecTV and AT&T TV services
in the U.S. into a new entity to be jointly run by the telecom
company and the private-equity firm. AT&T will retain a 70%
stake in the business. TPG will pay $1.8 billion cash for a 30%
stake.
The deal values the business well below the $49 billion -- about
$66 billion including debt -- that the Dallas company paid to buy
international satellite operator DirecTV in 2015. AT&T recently
struck $15.5 billion off the value of the unit, reflecting the
service's dimmer prospects.
Bidders including TPG and its rival Apollo Global Management
Inc. had been jockeying for the business since The Wall Street
Journal first reported on the sale process in August.
AT&T bought DirecTV near the peak of the pay-TV market,
before cord-cutting upended the sector. Netflix Inc. had about 75
million subscribers world-wide, far below the more than 200 million
subscribers it serves today. Cheap channel bundles costing $30 a
month or less hadn't yet pierced the market.
Write to Drew FitzGerald at andrew.fitzgerald@wsj.com
(END) Dow Jones Newswires
February 25, 2021 16:54 ET (21:54 GMT)
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