15 Apr 2019

Hulu buys back AT&T’s stake in $1.43 billion deal

FILE PHOTO: The AT&T logo is pictured during the Forbes Forum 2017 in Mexico City, Mexico, September 18, 2017. REUTERS/Edgard Garrido/File Photo

(Reuters) – Hulu is buying back wireless carrier AT&T Inc’s 9.5 percent stake in the streaming service company in a deal valued at $1.43 billion, the two companies said on Monday.

The transaction valued Hulu at $15 billion. The company, which competes with Netflix Inc and Amazon.com’s Prime Video, has more than 25 million subscribers and is expected to lose $1.5 billion in the current fiscal year.

AT&T did not respond to a Reuters request for a comment on the structure of the deal.

Wall Street analysts were expecting Walt Disney Co, which holds a 60 percent stake in the joint venture that owns Hulu, to buy AT&T’s stake.

Comcast Corp’s NBCUniversal has a 30 percent stake. Based on the joint venture agreement, Disney and Comcast will get to decide on how they want to allocate the shares bought from AT&T.

Meanwhile, the wireless carrier said it will use the proceeds here from the deal to cut down its debt, which stood at $176.51 billion at the end of 2018.

AT&T said in November it could consider selling its stake in Hulu and review its non-core assets in 2019 as in an effort to cut its pile of debt.

Disney last week forecast Hulu’s subscribers to reach 40 million to 60 million by fiscal 2024 and become profitable in the United States by either 2023 or 2024.

Reporting by Vibhuti Sharma in Bengaluru; Editing by Arun Koyyur

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