AT&T is set to sell its entire 70 percent stake in satellite TV provider DirecTV to private equity firm TPG for $7.6 billion. This marks the telecom giant’s complete exit from a business that has seen declining distributions over the years.
AT&T originally acquired DirecTV in 2015 and later entered into a joint venture with TPG in 2021. At that time, TPG invested $1.8 billion for a 30 percent stake in DirecTV, which was valued at approximately $16 billion. Under the terms of their agreement, AT&T was prohibited from selling its stake for three years, a restriction that expired on July 31, 2023.
The sale provides AT&T with a strategic opportunity to streamline its focus on its core wireless and fiber connectivity operations, while also addressing its balance sheet.
AT&T has more than 8.8 million AT&T Fiber customers. AT&T passes 28 million+ consumer and business fiber locations. AT&T remains on track to pass 30 million+ consumer and business locations with fiber by the end of 2025.
Distributions from DirecTV had been steadily declining, with a drop from $2.65 billion in 2021 to $2.04 billion by the end of 2022. However, for 2024, AT&T anticipates distribution payments from DirecTV will total around $3 billion, Reuters news report said.
AT&T will receive an initial payment of $2 billion in 2025, with additional payments extending through 2029. The deal is expected to close in the second half of 2025. DirecTV’s management team, including CEO Bill Morrow, will be continue under TPG’s ownership.
