AT&T is selling its Vrio business to the private holding company Grupo Werthein for an undisclosed sum.
Vrio provides digital entertainment services in Latin America and the Caribbean with 10.3 million subscribers in 11 countries. It offers services in Brazil through the SKY brand and in Argentina, Barbados, Chile, Colombia, Curacao, Ecuador, Peru, Trinidad and Tobago and Uruguay through the DirecTV brand. It also offers its DirecTV GO OTT subscription service in some of these same countries. Vrio’s infrastructure includes satellites and broadcast centers.
Vrio’s broadband operations in Colombia and AT&T’s interest in SKY Mexico are not included in the transaction with Grupo Werthein.
Lori Lee, CEO for AT&T Latin America, said in a statement. “This transaction will further allow us to sharpen our focus on investing in connectivity for customers. We remain committed to Latin America through our wireless business in Mexico and services for multinational corporations operating in the region.”
Vrio has about 9,000 employees, and AT&T and Grupo Werthein said they expect that “substantially all employees who support Vrio’s operations today will transition to Grupo Werthein.”
The parties will have transition agreements in place under which AT&T will provide certain services, such as billing, infrastructure and software support to Grupo Werthein for one to three years after the transaction closes in early 2022.
AT&T did not specify how much it was selling Vrio for. It said, “AT&T classified Vrio as held-for-sale at June 30, 2021 and reported the asset group at fair value less cost to sell, which resulted in an impairment of $4.6 billion including $2.1 billion related to accumulated foreign currency translation adjustments.” An “impairment” is a permanent reduction in the value of a company’s asset.
The sale of Vrio is a continuation of AT&T's process of divesting some non-core assets to pay down its debt. In November 2020 it announced it had completed the sale of its wireless and wireline operations in Puerto Rico and the U.S. Virgin Islands to Liberty Latin America.
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And in a much bigger ($43 billion) deal, AT&T is spinning off its WarnerMedia business — which includes CNN, HBO Max and more — and combining it with Discovery Inc. to form a new standalone company that will be run by Discovery. WarnerMedia will become an investment instead of an operation for AT&T.
Another exit from media is AT&T’s sale of 30% of its DirecTV, U-verse and AT&T TV services to TPG Capital. AT&T CEO John Stankey said on today's Q2 2021 earnings call that deal should close within weeks.