Photographer: Matthew Staver/Bloomberg

AT&T Exploring an IPO of DirecTV Business in Latin America

Updated on
  • Carrier aims for share sale in the first half of the year
  • Plan could pave way for separation or create deal vehicle

AT&T Inc. is exploring an initial public offering of its stake in the DirecTV Latin America business, a move that could both help reduce debt from its planned takeover of Time Warner Inc. and perhaps pave the way for other deals.

AT&T is looking at selling shares in the first half of this year, according to a statement. The division, acquired in the $48.5 billion purchase of DirecTV in 2015, includes a satellite-TV service in the Caribbean and in South American countries from Colombia to Argentina, plus a 93 percent stake in Sky Brasil and 41 percent ownership of Sky Mexico. The assets have been valued at as much as $10 billion.

AT&T shares were little changed at $36.85 in early trading.

While the company has a growing mobile-phone business in Mexico, it has been lukewarm about the other Latin American assets. AT&T executives have at times talked about using the various TV operations in Latin America as a way to extend the reach of some of its future Time Warner programming. But at the same time, some of the governments and economies of countries like Venezuela and Brazil have presented challenges.

Listing the unit independently could be a first step toward separating the business or using it as a vehicle to acquire others. Potential merger partners in Latin America include Telefonica SA and John Malone’s Liberty Latin America Ltd.

Brazil’s antitrust officials said last year they’d only back the $85.4 billion Time Warner merger if the two U.S. companies keep Sky separate from the operations of Time Warner, which owns cable channels like CNN and TNT.

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