In two major transactions made public early Monday, private equity giant TPG announced its purchase from AT&T of full ownership of DirecTV and a merger of that company with satellite TV rival Dish.
In the first transaction, TPG agreed to purchase AT&T’s remaining 70 percent stake in DirecTV for $7.6 billion. Coupled with a 30 percent stake in the company acquired in 2021, the deal gives TPG complete ownership of DirecTV — and AT&T a final exit from its troubled and expensive entry into the home entertainment industry a decade ago.
Under terms of the agreement, according to a company filing with the SEC dated Sunday, AT&T would receive $1.7 billion of pre-tax quarterly distributions this year, including those for the third quarter which are not part of the agreement. A $5.4 billion of after-tax distributions in 2025 and a final distribution of $500 million in 2029 of after-tax proceeds.
AT&T announced the acquisition of DirecTV in May 2014. The $49 billion deal closed in July 2015.
In the second transaction, DirecTV agreed with EchoStar to acquire Dish DBS, which includes rival video distributors Dish TV and Sling TV, for $1 in nominal consideration and the assumption of its estimated $9.75 billion in debt. Dish DBS and DirecTV have already commenced an exchange offer for five different series of notes with that face value, along with consents to facilitate the acquisition.
Both deals are expected to close in late 2025.
With an integration of the two satellite video providers, DirecTV hopes to offer a broader choice of programming at a cheaper price, allowing it to compete in an increasingly competitive and fractured environment of streaming by tech companies like Amazon and Google, as well as content providers and cable TV.
In the sale of the AT&T stake in DirecTV, Dallas-based AT&T is advised by Gibson Dunn & Crutcher led from Dallas by partners Robert Little and Joe Orien and associates William Altabef in Dallas and Sonari Chidi in Los Angeles. From New York, partner Doug Horowitz and of counsel Christopher Milla advised on financing. Partners Eric Sloan in Washington D.C. and Pamela Lawrence Endreny in New York advised on tax issues along with associates James Jennings in New York, David Horton in Los Angeles and Duncan Hamilton in Dallas. Partner Thomas Kim in Washington, D.C. advised on regulatory aspects of the deal.
For AT&T in-house counsel included Michael Pratt and Bill Caldwell.
On the DirecTV/EchoStar transaction, PJT Partners is acting as lead financial advisor to DIRECTV. Barclays is lead for TPG and J.P. Morgan is lead financial advisor to EchoStar. BofA Securities, Evercore, LionTree and Morgan Stanley also provided financial advice to DIRECTV and TPG.
On the legal side, Ropes & Gray, Crowell & Moring and HWG are acting as legal counsel to DIRECTV.
TPG is also being advised by Ropes & Gray along with Cleary Gottlieb Steen & Hamilton and Mintz, Levin.
EchoStar is advised by White & Case and Steptoe & Johnson.