AT&T has announced a significant divestiture, selling its 70% stake in the satellite TV service DirecTV to private equity firm TPG for $7.6 billion. This transaction marks AT&T's exit from the satellite television sector, which has been experiencing diminishing revenues for the telecommunications giant.
The deal follows a previous partnership between AT&T and TPG established in 2021, where TPG invested approximately $1.8 billion in exchange for a 30% stake in DirecTV, valuing the company at around $16 billion at that time. A three-year restriction on selling AT&T's interest in DirecTV lapsed on July 31, paving the way for this latest transaction.
Financial Implications and Future Focus
This sale is expected to enhance AT&T's financial position and allow the company to focus more intently on its core wireless and fiber connectivity services. AT&T will receive an upfront payment in 2025, followed by additional payments through 2029, totaling $7.6 billion.
Over the past three years, AT&T has received significant cash distributions from DirecTV, totaling $19 billion. The current transaction will further strengthen AT&Ts balance sheet by pulling forward cash expected over the next several years.
Transaction Details
The sale is subject to customary closing conditions and is expected to close in the second half of 2025. This move aligns with AT&Ts strategy to be the leading wireless 5G and fiber connectivity company in America.
