DALLAS - AT&T announced plans to sell its wired and wireless network operations in Puerto Rico and the U.S. Virgin Islands to Latin American telecom company Liberty Latin America in a $1.95 billion deal as pressure to divest assets mounts.
In a statement Wednesday morning, Dallas-based AT&T described the transaction as including spectrum, real estate and leases as well as 1.1 million subscribers. Despite pressure to sell its pay TV business AT&T will retain DirecTV and FirstNet responsibilities under the deal, according to the company.
The transaction is expected to close in six to nine months and will affect 1,300 current AT&T employees who will move to Liberty Latin America.
"Our experienced and committed team members will continue to support these operations as we join Liberty Latin America," AT&T regional VP Jose J. Davila said in a statement. "Liberty Latin America has expressed its commitment to provide high-quality communications services to the people of Puerto Rico and the U.S. Virgin Islands. And we're confident that it is equally committed to supporting these communities."
The transaction with Liberty Latin America is still subject to review by the FCC and the Department of Justice.
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In a report made public in early September, activist investor Elliott Management revealed its 1% stake in the telecom giant as well as a report recommending a shift in strategy that would boost the company's value to shareholders. The report recommended AT&T sell off multiple portions of its business including DirecTV and wireless operations in Latin America.
Reports that AT&T began considering unloading its pay TV business several weeks ago could signal the investor's letter holds sway, however, company leadership has maintained that it believes its current overall strategy is the best plan for creating long-term value for its shareholders.
AT&T CFO John Stephens described the sale of Latin American operations as "a result of our ongoing strategic review of our balance sheet and assets to identify opportunities for monetization."
In an effort to free up cash flow AT&T has monetized more than $11 billion so far this year including the Latin American operations sale, according to the company.
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