AT&T Sells Latin American Satellite Business to Argentina’s Grupo Werthein


AT&T Inc.

BILLION -0.04%

said it had agreed to sell its Latin American Vrio satellite business to Argentina’s Grupo Werthein, continuing the Dallas telecom giant’s exit from the television business.

The sale covers 10.3 million subscribers across 11 countries in the Western Hemisphere, including Argentina, Chile and Colombia, inheriting AT&T’s purchase of DirecTV. The wireless carrier said the purchase would result in $4.6 billion in accounting fees, including $2.1 billion tied to “cumulative foreign currency translation adjustments.”

AT&T is expected to report quarterly earnings on Thursday.

An AT&T spokesman said the transaction has an enterprise value of $500 million, which will be paid out over the next several years. The companies expect to close the deal in early 2022.

Vrio has struggled with challenges unique to its home turf, including exchange rate fluctuations and economic downturns in key markets including Brazil, where it holds a controlling stake in the pandemic. Sky Brasil satellite television service. The company had previously written down its operations in Venezuela, where diplomatic tensions with the US threaten to do business.

Vrio’s DirecTV customer base isn’t shrinking as quickly as its counterpart in the US, where high-speed internet access has allowed tens of millions of customers to cut pay-TV cords in exchange for less online alternatives. more costly. In a statement, Grupo Werthein said it plans to invest in the business to meet viewer demand. The family-controlled conglomerate holds stakes in a range of businesses in Argentina and other Latin American countries.

AT&T is leaving the entertainment business to focus on wireless and broadband services. Company in February reached agreement to sell 30% stake in US pay-TV operation private equity firm TPG while relinquishing control of the business, which will be known as DirecTV upon closing. The companies assigned that deal an enterprise value of $16.25 billion, which includes about $6.4 billion in debt.

AT&T acquired DirecTV’s entire satellite operation in 2015 for about $49 billion, or $66 billion including buyback debt.

AT&T Latin America director Lori Lee said the acquisition will allow the company to focus more on core telecommunications services.

“We remain committed to Latin America through our wireless business in Mexico and services to multinational corporations operating in the region,” she said.

Write letter for Drew FitzGerald at andrew.fitzgerald@wsj.com

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Appears on July 22, 2021, print edition as ‘AT&T sells Vrio Satellite Business in Latin America.’



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