AT&T Exits Entertainment Industry: Sells Remaining Stake in DirecTV to TPG for $7.6 Billion
Monday, Sep 30, 2024 7:01 am ET
1min read AT&T, a telecommunications giant, has announced its exit from the entertainment industry by selling its remaining stake in DirecTV to private equity firm TPG for $7.6 billion. This strategic move allows AT&T to focus on its core wireless and fiber connectivity operations, while strengthening its balance sheet.
The transaction, expected to close in the second half of 2025, involves an initial payment of $2 billion in 2025 and additional payments totaling $500 million in 2029. AT&T anticipates receiving approximately $7.6 billion in cash payments from DirecTV through 2029. Upon closing, DirecTV will continue to be led by its current management team, including CEO Bill Morrow.
This sale comes as a much-needed exit for AT&T, which has been experiencing dwindling distributions from DirecTV over the past several years. For the year ended Dec. 31, 2023, distributions stood at $2.04 billion, down from $2.65 billion a year earlier. AT&T expects DirecTV distribution payments to be about $3 billion in aggregate for 2024.
The acquisition aligns with TPG's long-term investment strategy, as it strengthens its partnership with DirecTV and supports the company's innovation in value-oriented streaming and video offerings for consumers. TPG's proven expertise in the internet, digital media, and communications sectors will support DirecTV's efforts to grow its next-generation streaming service, which has millions of subscribers and delivers multi-billion dollars of revenue annually.
In conclusion, AT&T's sale of its remaining stake in DirecTV to TPG allows the telecommunications giant to focus on its core wireless and fiber connectivity operations, while strengthening its balance sheet. The acquisition aligns with TPG's long-term investment strategy, supporting DirecTV's innovation in streaming services and strengthening its partnership with the company.
The transaction, expected to close in the second half of 2025, involves an initial payment of $2 billion in 2025 and additional payments totaling $500 million in 2029. AT&T anticipates receiving approximately $7.6 billion in cash payments from DirecTV through 2029. Upon closing, DirecTV will continue to be led by its current management team, including CEO Bill Morrow.
This sale comes as a much-needed exit for AT&T, which has been experiencing dwindling distributions from DirecTV over the past several years. For the year ended Dec. 31, 2023, distributions stood at $2.04 billion, down from $2.65 billion a year earlier. AT&T expects DirecTV distribution payments to be about $3 billion in aggregate for 2024.
The acquisition aligns with TPG's long-term investment strategy, as it strengthens its partnership with DirecTV and supports the company's innovation in value-oriented streaming and video offerings for consumers. TPG's proven expertise in the internet, digital media, and communications sectors will support DirecTV's efforts to grow its next-generation streaming service, which has millions of subscribers and delivers multi-billion dollars of revenue annually.
In conclusion, AT&T's sale of its remaining stake in DirecTV to TPG allows the telecommunications giant to focus on its core wireless and fiber connectivity operations, while strengthening its balance sheet. The acquisition aligns with TPG's long-term investment strategy, supporting DirecTV's innovation in streaming services and strengthening its partnership with the company.
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