An AT&T store in New York, in an undated file photo.Mark Lennihan/The Associated Press
AT&T Inc. T-N said on Monday it would sell its entire 70-per-cent stake in satellite TV provider DirecTV to private equity firm TPG for US$7.6-billion, exiting a business marked by declining distributions for the telecom operator.
AT&T, which acquired DirecTV in 2015, signed a joint-venture agreement with TPG in 2021, in which the private equity firm contributed about US$1.8-billion in cash in exchange for a 30-per-cent stake in DirecTV that was valued at about US$16-billion at the time.
The telecom company had agreed not to sell its stake in DirecTV for a three-year period, which expired on July 31.
The stake sale comes as a much-needed exit for AT&T, which has been seeing dwindling distributions from DirecTV over the past several years. For the year ended Dec. 31, distributions stood at US$2.04-billion, down from US$2.65-billion a year earlier.
For 2024, AT&T said it expects DirecTV distribution payments to be about US$3-billion in aggregate.
The sale would also allow AT&T to focus on its core wireless and fibre connectivity operations and help improve its balance sheet.
Shares of AT&T were marginally up in premarket trading.
AT&T would receive an initial payment of US$2-billion in 2025, and additional payments through 2029, the company said in a filing on Monday. The deal is expected to close in the second half of 2025.
Upon closing, DirecTV will continue to be led by its current management team, including chief executive officer Bill Morrow, TPG said on Monday.