(Reuters) – AT&T said on Monday it will sell its entire 70% stake in satellite TV provider DirecTV to private equity firm TPG for $7.6 billion, exiting a business marked by falling dividends for the telecom operator.
AT&T, which acquired DirecTV in 2015, signed a joint venture agreement with TPG in 2021, with the private equity firm contributing about $1.8 billion in cash for a 30% stake in DirecTV that was worth about $16 billion at the time. .
The telecommunications company had agreed not to sell its stake in DirecTV for a period of three years ending on July 31.
The stake sale comes as a much-needed exit for AT&T, which has seen dwindling distributions from DirecTV over the past several years. For the year ending December 31, distributions were $2.04 billion, down from $2.65 billion the previous year.
For 2024, AT&T said it expects DirecTV distribution payments to be about $3 billion in total.
The sale will also allow AT&T to focus on its core wireless and fiber operations and help improve its balance sheet.
AT&T shares rose marginally in premarket trading.
AT&T will receive an initial payment of $2 billion in 2025, and additional payments through 2029, the company said in a statement 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 CEO Bill Morrow, TPG said Monday.
(Reporting by Deborah Sophia in Bengaluru; Editing by Shinjini Ganguly)
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