American telecom major AT&T announced via a statement on Thursday that it will be selling a 30% stake in DirecTV to private equity group TPG that values the broadcast provider at $16.25bn, which translates to a sale value of $4.875bn. As per the structure of the transaction, AT&T will spin-off DirecTV and its other pay-TV units to a separate entity, of which AT&T will hold 70%. The company had purchased DirecTV under former CEO Randall Stephenson in 2015 for $50bn, indicating that the sale to TPG is at less than a third of what it had originally paid. DirecTV has lost over 7mn customers since 2017 with the onset of online streaming services making traditional cable and satellite players obsolete. AT&T commented on the latest transaction, “It is fair to say that some aspects of the [DirecTV] transaction have not played out as we had planned.” The move is primarily aimed at shoring up cash to trim its massive debt pile, which stood at $147.5bn as at end-December. Much of the debt pile was accumulated after a series of acquisitions including HBO, Warner Bros movie studio and CNN.
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