NEW YORK: Hulu has bought back wireless carrier AT&T Inc’s stake in the US entertainment streaming service for $1.43 billion, in a deal that values Hulu at $15 billion, the two companies said.
The sale of AT&T’s 9.5 per cent stake to Hulu in a cash deal gives Walt Disney Co, which holds a 60 per cent stake in Hulu via a joint venture, more control of the company.
Comcast Corp’s NBCUniversal has a 30 per cent stake in Hulu. Based on the joint venture agreement, Disney and Comcast will decide how they want to allocate the shares bought from AT&T.
Hulu, 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.
Hulu’s total value has risen from a reported $5.8 billion in 2016, when Time Warner — now a part of AT&T — bought the stake. Netflix at the time had a market capitalisation of about $41 billion. Based on Monday’s stock market closing price, Netflix is valued at $152 billion.
AT&T, which is preparing to launch its own subscription streaming video service later this year, said that its unit WarnerMedia would continue to work with Hulu to deliver content over the platform. It did not give further details.
“WarnerMedia will remain a valued partner to Hulu for years to come as we offer customers the best of TV, live and on demand, all in one place,” Hulu Chief Executive Officer Randy Freer said in a statement.
AT&T said it would use the proceeds here from the deal to reduce debt, which stood at $176.5 billion at the end of 2018.
The company had said in November it could consider selling its stake in Hulu and review its non-core assets in 2019.
The transaction did not require any governmental or other third-party approvals and was simultaneously signed and closed, Hulu and AT&T said. — Reuters
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