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AT&T considering separation from DirecTV: WSJ
Posted on Thursday, 19 September 2019 13:15
AT&T is exploring a range of options for its DirecTV business, four years after picking up the content provider for USD 67.10 billion, people familiar with the matter told the Wall Street Journal (WSJ). Sources in the know said the media conglomerate is considering alternatives, such as spinning off the group into a separate public company or combining its assets with satellite television rival Dish Network. However, if the latter option was to be pursued, it is likely to face regulatory hurdles as it could leave consumers with fewer options for subscription film, series and programme content providers. AT&T, which has been involved in two of the top 20 deals announced over the last five years, according to Zephyr, the M&A database published by Bureau van Dijk, may decide to hold onto DirecTV despite its struggles with losing subscribers due to more people shifting to online steaming services such as Netflix and Amazon Prime. The WSJ observed that the business still contributes to a sizable volume of cash flow and customers to the larger business, most commonly known for its mobile phone network. AT&T has been focused on expanding into a media conglomerate recently, which included the acquisition of DirecTV, as well as the USD 108.70 billion it paid for Time Warner in June last year, in the second-largest deal to be signed off in the last five years, Zephyr shows. The news comes after Elliott Management took a USD 3.20 billion stake in the company last week and urged it to consider options for its television subscription arm. In AT&T’s second quarter financial results, it said DirecTV Now has 1.30 million subscribers. The media group generated total revenue of USD 89.78 billion in the six months to 30th June 2019, a 16.6 per cent increase from USD 77.02 billion in the corresponding period of 2018. Net income totalled USD 8.32 billion in H1 2019 (H1 2018: USD 10.01 billion). © Zephus Ltd