U.S. telecommunications giant AT&T (T) has agreed to sell its remaining 70% stake in satellite TV service provider DirecTV to private equity firm TPG (TPG) for $7.6 billion U.S.
The sale takes AT&T out of the satellite TV business, which has been in decline for several years as consumers switch to streaming services.
In 2021, AT&T signed a joint-venture agreement with TPG, which contributed $1.8 billion U.S. in cash in exchange for a 30% stake in DirecTV.
Under terms of that agreement, AT&T agreed not to sell its remaining 70% stake in DirecTV for a three-year period, which expired on July 31 of this year.
DirectTV was valued at about $16 billion U.S. back in 2021, though its valuation has since been cut by more than half as its business declines.
AT&T said that selling its remaining 70% stake in DirectTV will enable it to focus on its core wireless internet and fibre optic businesses and improve its balance sheet.
The stock of AT&T has declined 23% over the past five years to currently trade at $21.90 U.S. per share.
TPG’s stock has risen 77% in the last five years to trade at $58.01 U.S. a share.
