AT&T (T) has agreed to sell its Vrio unit, excluding certain assets to Grupo Werthein. Vrio operates the DirecTV and Sky brands in Latin America. In addition to broadcast television, it also offers online video streaming under the DirecTV Go brand and broadband services.
Vrio operates in 11 countries across Latin America and has attracted 10.3 million subscribers. Assets excluded from the Grupo deal are Vrio’s broadband business in Colombia and AT&T’s stake in Sky Mexico.
AT&T Latin America CEO Lori Lee commented, “This transaction will further allow us to sharpen our focus on investing in connectivity for customers.”
AT&T has an agreement with Grupo to provide certain services to Vrio for up to three years after the sale. Those services include billing and infrastructure support. All Vrio staff are expected to transition to Grupo upon closing of the transaction.
Grupo and AT&T did not disclose the financial terms of the deal, however, they did reveal that AT&T has booked a $4.6 billion impairment charge related to the Vrio unit. The transaction is set to close in early 2022. (See AT&T stock charts on TipRanks).
In June, Redburn analyst Steve Malcolm initiated coverage on AT&T stock with a Sell rating and a price target of $23. Malcolm’s price target suggests 17.56% downside potential.
Consensus among analysts is a Hold based on 7 Buys, 6 Holds, and 3 Sells. The average AT&T price target of $31.79 implies 13.94% upside potential to current levels.
AT&T scores a 7 out of 10 on TipRanks’ Smart Score rating system, suggesting that the stock is likely to perform in line with market averages.