AT&T Sells Majority Stake in DirecTV to TPG Partners for $7.6 Billion

AT&T is making significant changes in its business strategy, as it has decided to divest its interest in the entertainment sector by selling its majority stake in the satellite TV provider DirecTV to private equity firm TPG Partners for a whopping $7.6 billion. This decision marks a substantial shift for AT&T, coming more than a decade after the telecom giant acquired DirecTV for a staggering $48.5 billion.

AT&T sells remaining stake in DirecTV for $76 billion

The sale comes in the wake of a significant transformation in the subscription TV landscape. The rise of streaming services, particularly platforms like Netflix, has led to a decline in traditional cable and satellite TV subscriptions, resulting in what has been termed the "cord-cutting phenomenon." In light of losing millions of customers to these alternatives, AT&T took the strategic step of selling a 30% stake in the DirecTV business to TPG in a deal valued at $16.2 billion in 2021.

Refocusing Efforts

By divesting its remaining 70% stake in DirecTV, AT&T aims to concentrate on its core competencies and establish itself as a leading player in the wireless 5G and fiber connectivity market in America. This strategic realignment reflects the company's commitment to adapting to the evolving demands of consumers and positioning itself for future growth.

The transaction is anticipated to be finalized in the latter half of 2025. In a separate but notable development, DirecTV has announced its intention to acquire satellite TV provider Dish from EchoStar, a deal that includes Sling TV, for a nominal sum of $1 along with the assumption of approximately $9.8 billion in debt.

In response to this seismic shift, shares of AT&T witnessed a slight uptick before the market opened on Monday, reflecting investor sentiment towards the company's strategic direction.