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Is AT&T Considering Divesting Latin American Pay-TV Assets?
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U.S. telecom giant AT&T Inc. (T - Free Report) is reportedly exploring a strategic option to sell a major part of its pay-TV operations in Latin America, per Reuters. The company acquired these assets as part of its $49 billion takeover of the satellite TV operator DIRECTV.
At present, AT&T holds 93% Sky Brasil along with PanAmericana satellite and cable TV services. The company has 13.6 billion subscribers across Brazil, Venezuela, Argentina, Colombia, Peru, Ecuador, Chile and Uruguay. Notably, Brazil solely commands 5.52 million customers. In the second quarter of 2017, Latin American business generated $1.4 billion in revenues, half of which came from Sky Brasil.
We believe that there exist two reasons for AT&T to mull over Latin American pay-TV business sales. First, the company has decided to acquire U.S. media behemoth Time Warner Inc. for about $85.4 billion. If the deal materializes, the company’s outstanding debt will cross an enormous $180 billion.
Management is pursuing a number of other options to raise funds and pay down debt for the acquisition. The company is expecting to raise around $22.5 billion through a seven-tier bond offering. It has decided to sell Digital Life home security business for around $1 billion. As per Reuters, AT&T is hopeful about collecting approximately $8 billion for the divestiture of Latin American pay-TV assets. Liberty Global plc. (LBTYA - Free Report) , Telefonica SA (TEF - Free Report) and Millicom are possible buyers.
With respect to Time Warner merger, AT&T is yet to get regulatory approval from two countries. Beside the home country United States, the other one is Brazil. CADE, the antitrust agency of Brazil, has argued that the approval of the deal will violate the agency’s stated policy of the separation of service providers and content developers. For that, CADE wants AT&T to disinvest its pay-TV assets in that country. Notably, Sky Brazil currently holds about 29% of the pay-TV market in Brazil, followed by cable TV operator Net Servicos de Comunicacao.
Meanwhile, AT&T has decided not to sale pay-TV assets in Mexico. The company already has a strong foothold in the country’s wireless market. Leveraging, wireless and pay-TV services, AT&T is looking to extensively explore the lucrative Mexican telecom market.
With news stories about computer hacking and identity theft becoming increasingly commonplace, the cybersecurity industry looks like a promising investment opportunity. But which stocks should you buy? Zacks just released Cybersecurity: An Investor’s Guide to Locking Down Profits to help answer this question.
This new Special Report gives you the information you need to make well-informed investment choices in this space. More importantly, it also highlights 4 cybersecurity picks with strong profit potential.
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Is AT&T Considering Divesting Latin American Pay-TV Assets?
U.S. telecom giant AT&T Inc. (T - Free Report) is reportedly exploring a strategic option to sell a major part of its pay-TV operations in Latin America, per Reuters. The company acquired these assets as part of its $49 billion takeover of the satellite TV operator DIRECTV.
At present, AT&T holds 93% Sky Brasil along with PanAmericana satellite and cable TV services. The company has 13.6 billion subscribers across Brazil, Venezuela, Argentina, Colombia, Peru, Ecuador, Chile and Uruguay. Notably, Brazil solely commands 5.52 million customers. In the second quarter of 2017, Latin American business generated $1.4 billion in revenues, half of which came from Sky Brasil.
We believe that there exist two reasons for AT&T to mull over Latin American pay-TV business sales. First, the company has decided to acquire U.S. media behemoth Time Warner Inc. for about $85.4 billion. If the deal materializes, the company’s outstanding debt will cross an enormous $180 billion.
Management is pursuing a number of other options to raise funds and pay down debt for the acquisition. The company is expecting to raise around $22.5 billion through a seven-tier bond offering. It has decided to sell Digital Life home security business for around $1 billion. As per Reuters, AT&T is hopeful about collecting approximately $8 billion for the divestiture of Latin American pay-TV assets. Liberty Global plc. (LBTYA - Free Report) , Telefonica SA (TEF - Free Report) and Millicom are possible buyers.
With respect to Time Warner merger, AT&T is yet to get regulatory approval from two countries. Beside the home country United States, the other one is Brazil. CADE, the antitrust agency of Brazil, has argued that the approval of the deal will violate the agency’s stated policy of the separation of service providers and content developers. For that, CADE wants AT&T to disinvest its pay-TV assets in that country. Notably, Sky Brazil currently holds about 29% of the pay-TV market in Brazil, followed by cable TV operator Net Servicos de Comunicacao.
Meanwhile, AT&T has decided not to sale pay-TV assets in Mexico. The company already has a strong foothold in the country’s wireless market. Leveraging, wireless and pay-TV services, AT&T is looking to extensively explore the lucrative Mexican telecom market.
Price performance of AT&T
Over the past 90 days, the stock price of AT&T has decreased 3.83% compared with the industry’s decline of 1.46%. The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
4 Promising Stock Picks to Keep an Eye On
With news stories about computer hacking and identity theft becoming increasingly commonplace, the cybersecurity industry looks like a promising investment opportunity. But which stocks should you buy? Zacks just released Cybersecurity: An Investor’s Guide to Locking Down Profits to help answer this question.
This new Special Report gives you the information you need to make well-informed investment choices in this space. More importantly, it also highlights 4 cybersecurity picks with strong profit potential.
Get the new Investing Guide now>>