And then there were two. Hulu, a month ago owned by four major media companies – Disney, 21st Century Fox, NBCUniversal and AT & T / Werner Media – will now be owned by Disney and NBCU. AT&T and Hulu have signed an agreement for AT&T to sell their minority shareholding in Hulu back to the joint venture.
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The transaction valued Hulu at $ 15 billion, with AT&T being 9.5% interest worth $ 1.43 billion.
After Disney's latest $ 71.3 billion acquisition of 21st Century Fox assets, including its stake in Hulu, Disney became a majority shareholder in the joint venture by about 60%, followed by NBCU (30%) and WernerMedia. The two remaining owners now have to allocate WarnerMedia's 9.5% share. The conventional split would be according to Disney and NBCU's current ownership (2: 1), but all will be negotiated between the two sides over the next few weeks.
Hulu has become an important part of Disney's portfolio and was presented during the company's major direct-to-consumer presentation last week. Today's transaction no doubt further speculates that Disney could eventually become Hulu's sole proprietor.
"We thank AT & T for their support and investment over the past two years and look forward to cooperation in the future. WarnerMedia will be a valuable partner to Hulu for many years to come, as we offer customers the best of TV, live and on demand, in one place, says Hulu CEO Randy Freer.
The transaction did not require any government or other third party approvals and was signed simultaneously and closed.
AT&T will use revenue from this transaction along with further planned sales of non-nuclear assets to reduce debt after its acquisition of Time Warner of $ 85 billion last summer.
AT & T SVP and CFO John Stephens last month said growing WarnerMedia and reducing debt are the company's main priorities. Telco closed the Time Warner deal with $ 180 billion in debt, had shaved $ 9 billion by the end of 2018 and had said it would use another $ 12 billion in free cash flow to continue paying it.