AT&T, TPG Capital Close DIRECTV Transaction

AT&T and TPG Capital, the private equity platform of global alternative asset company TPG, closed a transaction that will position DIRECTV as a new company. The new entity will own and operate the assets formerly ran by DIRECTV, AT&T TV and U-verse video services under the auspices of the carrier.

With this agreement, AT&T is contributing its US video business unit assets in exchange for “preferred units” and a 70 percent interest in common DIRECTV units. TPG, meanwhile, is contributing $1.8 billion in change for preferred units and a 30 percent stake.

DIRECTV will continue to offer HBO Max and other bundled wireless, broadband and in-place customer discounts. Its new Board will include DIRECTV CEO, Bill Morrow; AT&T voting members Steve McGaw and Thaddeus Arroyo and TPG appointees David Trujillo and John Flynn.

The sale did not include WarnerMedia’s HBO Max streaming platform and regional sports networks (part of pending WarnerMedia-Discovery deal), Vrio Latin American video operations (being sold to Group Werthein), U-verse network assets and the Sky Mexico investment

As of the end of Q2’21, DIRECTV had approximately 15.4 million premium video subscribers.

At close, AT&T noted that it received $7.1 billion and transferred about $195 million in video business debt. The provider noted that proceeds will support debt-reduction efforts.