AT&T inks deal with TPG to spin off video unit - Mobile World Live

AT&T inks deal with TPG to spin off video unit

26 FEB 2021

US operator AT&T announced a deal to spin off its DirecTV, AT&T TV and U-verse video services into a new company co-owned by investment group TPG Capital, in a move which values the business at $16.25 billion.

Under the terms of the deal, TPG Capital will pay $1.8 billion for a 30 per cent stake in the new company, which will use the DirecTV moniker and be led by the current head of AT&T’s US video unit, Bill Morrow. AT&T will hold a 70 per cent stake in exchange for contributing its US video services.

A board comprised of Morrow and two representatives each from AT&T and TPG Capital will govern the new company.

The deal is expected to close in 2H 2021, after which AT&T said it expects the new company to pay it $7.6 billion in cash and assume $200 million of existing DirecTV debt. Funds received from the deal will be used to pay down the operator’s debt.

A commercial agreement between AT&T and the new company will allow the operator to continue bundling video services with its mobile and fixed broadband products.

AT&T CEO John Stankey stated “TPG is the right partner for this transaction and creating a new entity is the right way to structure and manage the video business for optimum value creation.”

The move follows months of rumours AT&T was exploring a sale of its ailing video unit.

AT&T bought DirecTV for $49 billion in 2015. In January, the operator revealed it recorded a $15.5 billion charge in Q4 2020 related to the reassessment of the value of its video business.



Diana Goovaerts

Diana is Mobile World Live's US Editor, reporting on infrastructure and spectrum rollouts, regulatory issues, and other carrier news from the US market. Diana came to GSMA from her former role as Editor of Wireless Week and CED Magazine, digital-only...

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