Private-equity firm TPG agreed to buy AT&T’s remaining stake in DirecTV and merge the satellite company with rival Dish in a one-two punch designed to keep the pay-TV provider competitive in the streaming era.
The Wall Street Journal reports AT&T agreed to sell its remaining 70% share of DirecTV to TPG for roughly $7.6 billion in payments through 2029, sealing the telecom giant’s exit from the entertainment business. TPG bought a 30% stake in 2021.
In a separate deal announced Monday, DirecTV agreed to buy Dish from owner EchoStar SATS 8.85%increase; green up pointing triangle for a nominal $1, plus the assumption of roughly $9.8 billion in debt. That merger depends on an agreement with bondholders to write off about $1.6 billion of the Dish obligations as well as approval from multiple federal regulators.
The transaction would complete an exit that started in 2021 when AT&T sold a 30% stake in DirecTV’s U.S. operations to create a joint venture with TPG. The venture has been paying out cash distributions to its owners. AT&T said it has received $19 billion in payments since 2021.
In its deal with EchoStar, TPG will assume Dish’s debt if bondholders agree to the exchange. TPG credit unit Angelo Gordon and DirecTV also agreed to extend EchoStar $2.5 billion in financing to satisfy debt maturing in November.
AT&T’s exit from DirecTV fits the company’s strategy to pay down debt and refocus on its cellphone and broadband businesses. Chief Executive John Stankey once championed the entertainment offerings but opted to leave the sector soon after he took over in 2020, arguing that phone and internet offerings appealed more to the company’s core investor base.
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