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AT & T investigates separation possibilities with DirecTV Unit



AT & T
Inc.


T -1.08%

examines the separation from the DirecTV satellite unit, as the persons familiar with the matter said, a move that requires a sharp course correction in the director general's strategy Randall Stephenson Would Mean

The telecommunications giant has considered several options, including the spin-off of DirecTV into a separate public company and the combination of the assets of DirecTV with Dish Network Corp. ., the rival for satellite television, people said.

AT & T may eventually choose to maintain DirecTV. Despite the difficulties of satellite service, when consumers break their TV connections, it still contributes a significant volume of cash flow and customer accounts to its parent company.

AT & T acquired DirecTV in 201

5 for $ 49 billion. The shrinking satellite business of the company is being scrutinized after activist investor Elliott Management Corp. announced a $ 3.2 billion stake in AT & T last week and released a report requesting strategic changes. Elliott told investors that AT & T should unload DirecTV, the Wall Street Journal reported earlier.

There could be regulatory hurdles for a deal with Dish, which has about 12 million subscribers. When Dish's predecessor, EchoStar Communications Corp., and DirecTV's former owner, Hughes Electronics Corp., attempted a merger in 2001, the regulators blocked the merger for antitrust reasons. More recently, Dish Chairman Charlie Ergen interviewed DirecTV in 2014 but lost to AT & T.

Commenting on the idea of ​​merging the two satellite providers, John Stephens, CFO at AT & T, said: "From a regulatory perspective, this was unsuccessful, and I do not know that anything changes in this regulatory perspective. " added at an investor conference last week, "I understand the industrial logic, but frankly it was tried and rejected."

Write to Shalini Ramachandran at [email protected] and Drew FitzGerald at [email protected]

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