Private equity firm Apollo Global Management is reportedly negotiating to acquire AT&T’s satellite TV service, DirecTV, along with competitor Dish Network.
The complicated transaction would enable AT&T to offload about $20 billion in debt, while maintaining control of the satellite service. It would also allow Dish Network CEO Charlie Ergen to unload the company’s declining pay-TV business, according to Fox Business, which first reported the story based on information from sources familiar with the situation.
Ergen, who has recently moved the company’s focus toward wireless networks and 5G, has made no secret his desire to combine the two satellite businesses.
AT&T, which acquired DirecTV in 2015 for $49 billion, also purchased Time Warner for $85 billion, sending its debt load into the stratosphere.
Apollo, which has about $250 billion in its asset portfolio, would provide financing for the deal in exchange for a minority stake in the combined entity. The firm specializes in leveraged buyout transactions and purchases of distressed securities involving corporate restructuring, special situations, and industry consolidations. Its holdings include Caesars Entertainment Corporation, CareerBuilder, ADT and Rackspace.
AT&T told Fox it has received the offer but that there were no active discussions at this time.
COO John Stankey, who is also CEO of WarnerMedia, last month reiterated AT&T’s support DirecTV and over-the-top video unit, AT&T TV Now.
“We’re constantly looking at the [business] portfolio,” Stankey told The Wall Street Journal. “That’s the normal course of business and it’s not unique to DirecTV.”