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AT&T is set to close a deal to sell a substantial minority stake in its DirecTV, AT&T TV Now and U-Verse businesses to private equity firm TPG, according to people familiar with the matter.
A deal could be announced as early as this week, said the people, who have asked not to be named because the talks are private.
The deal will value AT & T’s business around $ 15 billion. AT&T acquired DirecTV in 2015 for $ 48.5 billion ($ 67 billion with debt).
AT&T has moved away from traditional pay television in recent years by centering its media strategy around HBO Max. DirecTV, U-Verse, and AT&T TV Now are based on a broadcast and cable network linear television business that loses millions of subscribers each year.
AT&T lost nearly 3 million video customers last year and took on a $ 15.5 billion impairment charge due to the company’s reassessment of its domestic video business.
A sale will provide AT&T with additional liquidity to repay its debt, which stands at around $ 150 billion and has been steadily declining over the past year.
Hedge fund Elliott Management took an activist stake in AT&T in September 2019. In a letter to management, Elliott asked AT&T to focus its strategic operations while considering divesting non-core assets – including DirecTV. AT&T CEO John Stankey has resisted a full sale.
TPG declined to comment. AT&T could not be reached immediately for comment.
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