Sullivan and Cromwell advised
Ropes and Gray is advising TPG on the deal, which values the new company at about $16 billion, a third of what AT&T paid for DirecTV six years ago.
Cleary Gottlieb said it is advising TPG on antitrust and fund formation matters stemming from the transaction.
The new company will be jointly governed by a board with two representatives each from AT&T and TPG, as well as a fifth seat for the CEO, which at closing will be Bill Morrow, CEO of AT&T’s U.S. video unit, according to a statement.
“TPG is the right partner for this transaction and creating a new entity is the right way to structure and manage the video business for optimum value creation,” said AT&T CEO John Stankey.
After closing, expected in the second quarter, AT&T will hold 70% of the new company, which will be named DirecTV. The new DirecTV will also includes AT&T TV and U-Verse.
AT&T said it expects to get $7.6 billion in cash from the transaction and unload $200 million of existing DirecTV debt to the new company.