Over the last few months, there has been growing pressure on AT&T from investors to do something with the declining DIRECTV satellite unit. Some investors have even called on AT&T to sell off DIRECTV’s satellite service. Now according to a report from Fox Business, there is a deal in the works that would see DIRECTV and DISH merge into a new company that would be run by AT&T.
According to reports, the private equity firm Apollo Global Management is working with an outside banker for a deal that would merge DIRECTV and Dish into a new company. This deal would give AT&T control over the new company but would also help limit AT&T’s liabilities. Both Apollo and DISH would hold a minority equity stake in the new company.
“What no one has picked up on is just because AT&T has said it doesn’t want to sell DIRECTV, doesn’t mean they won’t spin it off,” a person with direct knowledge of the matter told FOX Business. “This proposal is not a direct sale.”
Apollo Global Management is the world’s largest private equity fund with nearly $250 billion in assets under management has reportedly presented this proposal to both DISH and AT&T. According to reports, Apollo Global management believes they can get approval based on the recent T-Mobile merger deal with Sprint that was just approved by the Department of Justice.
DISH has recently been moving more focus on Wireless services, 5G, and Sling TV. AT&T has wanted to use DIRECTV to move customers over to its more profitable AT&T TV service. This deal could give DISH a new injection of cash to help grow its new wireless phone service and at the same time give AT&T a larger customer base to push its AT&T TV too.
For now, no deal has been reached, but both AT&T and DISH have looked at the offer, and according to reports the deal is not dead.
What do you think about merging DIRECTV and DISH into a new company run by AT&T? Leave us a comment and let us know what you think of this proposed deal.
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