Hulu buys back AT&T's stake in $1.43 billion deal
Hulu is buying back wireless carrier AT&T Inc`s 9.5 percent stake in the U.S. entertainment streaming service in a deal valued at $1.43 billion, the two companies said on Monday.
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.
The deal implies Hulu`s total value is some $15 billion - up 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 and is currently valued at $152 billion as on Monday`s close.
The move gives Walt Disney Co, which holds a 60 percent stake in Hulu via a joint venture, more control of the company.
Comcast Corp`s NBCUniversal has a 30 percent stake. Based on the joint venture agreement, Disney and Comcast will decide on how they want to allocate the shares bought from AT&T.
It was unclear how the deal could affect content on Hulu in the immediate future. AT&T is preparing to launch its own subscription streaming video service.
Hulu Chief Executive Officer Randy Freer said in a statement that "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."
AT&T did not respond to a Reuters request for comment on the structure of the deal.
The wireless carrier said it would use the proceeds from the deal to cut down its 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.
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.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.