(Reuters) -AT&T said on Monday it would sell its entire 70% stake in satellite TV provider DirecTV to private equity firm TPG for $7.6 billion, exiting a business characterized 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 approximately $1.8 billion in cash in exchange for a 30% stake in DirecTV, which at the time was valued at approximately $16 billion. .
The telecom company had agreed not to sell its stake in DirecTV for a three-year period ending July 31.
The stake sale is a much-needed exit for AT&T, which has faced declining DirecTV distributions in recent years. For the year ended December 31, benefits were $2.04 billion, compared to $2.65 billion a year earlier.
AT&T said it expects distribution payments for DirecTV to total about $3 billion by 2024.
The sale would also allow AT&T to focus on its core wireless and fiber connectivity businesses and help improve its balance sheet.
Shares of AT&T rose marginally in premarket trading.
AT&T would receive an initial payment of $2 billion in 2025, and additional payments through 2029, the company said in a filing Monday. The deal is expected to close in the second half of 2025.
Following the closure, 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 Ganguli)
