The American multinational conglomerate holding company AT&T has entered in to a deal to sell a minority stake in satellite broadcaster DirecTV . The stake is sold to a private equity group TPG (Texas Pacific Group) which focuses on Leveraged buyouts and growth capital.
The equity group TPG will establish a new company, named DirectTV in which TGP will own a 30% stake and AT&T will have 70%.
In the new agreement DirecTV will own and operate the company’s AT&T TV, DirecTV, and U-verse video services.
The new formed company’s value will be of $16.25 billion, AT&T acquired DirecTV for $48.5 billion.
By the second half of 2021 the deal is expected to close.
Once the transaction is completed, The current AT&T customers will become New DirecTV subscribers.
By the end of 2020, there were about 17.2 million subscribers off AT&T’s video unit.
Existing content deals will also be transfer to the New DirecTV.
The new company will be run by two representatives one from AT&T and TPG and Bill Morrow, the Chief Executive officer of AT&T United States.
John Stankey, The Chief Executive Officer of AT&T said:
“We certainly didn’t expect this outcome when we closed the DirecTV acquisition in 2015,”
“while noting the deal is in the best interest off AT&T shareholders.”
Both AT&T and TPG said:
They believe that the new structure will provide greater flexibility,
focus and resources to best position the business to succeed in long term.
And they believe in delivering on their commitment to customers, shareholders and employees.
With best in class content The new DirecTV will continue to provide competitive video service.
AT&T TV Now, DirecTV and U-Verse are all based around cable networks that is loosing millions of subscribers each year.
In a statement the AT&T said that they’ve made this decision to
completely focus on its streaming assets and connectivity.
