AT&T is approaching 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 immediately after this week, said people, who asked not to be named because the talks are private.
The deal will value AT&T’s business at about $ 15 billion. AT&T acquired DirecTV in 2015 for $ 48.5 billion ($ 67 billion in debt).
AT&T has moved away from traditional pay-TV in recent years because it has centered its media strategy around HBO Max. DirecTV, U-Verse and AT&T TV Now are based on a linear television and cable network business that loses millions of subscribers every year.
AT&T lost nearly 3 million video customers last year and took a $ 15.5 billion depreciation fee due to the company’s revaluation of its domestic video business.
A sale will give AT&T extra money to pay off its debt, which amounts to about $ 150 billion and has steadily declined over the past year.
The Elliott Management Hedge took over an active stake in AT&T in September 2019. In a letter to management, Elliott called on AT&T to focus its strategic operations, also considering divesting non-core assets – including DirecTV. AT&T CEO John Stankey withstood a full sale.
TPG declined to comment. AT&T could not be reached immediately for comment.