DTH provider DIRECTV announced yesterday that it has completed a US$604.8m cash-for-stock transaction to buy an 18.9% stake in Satellite TV operator SKY Brasil from the Brazilian communications group Globo.
The transaction means that DIRECTV’s total…
DTH provider DIRECTV announced yesterday that it has completed a US$604.8m cash-for-stock transaction to buy an 18.9% stake in Satellite TV operator SKY Brasil from the Brazilian communications group Globo.
The transaction means that DIRECTV’s total stake in SKY Brasil is now 93%, while Globo Comunicacoe e Participacoes S.A (Globo) holds the remaining 7%.
SKY Brazil has over eight million subscribers.
The deal resulted from a 2004 exchange agreement between Globo and the other shareholders in SKY Brasil.
This agreement required DIRECTV to acquire all or a portion of at least 50% of Globo’s shares in SKY Brasil. Globo informed DIRECTV that it would exercise its right to exchange its shares in June 2010.
DIRECTV declined to provide SatelliteFinance with details on the advisers for the deal.
DIRECTV is a DTH video service that supplies 27.6 million customers in the US and Latin America.
In September, it made a US$3bn three tranche senior unsecured bond offering. It said, at the time, that the proceeds would be used for general corporate purposes, including the likely repayment of US$1.22bn in outstanding borrowings in its senior unsecured credit facility.
The company is looking to expand its Latin American operations.
It announced earlier in the year that it plans to invest US$46m in Argentina during 2011 in order to strengthen its core DTH product and to begin offering internet services.
The initial plan is to roll out its service in Mendoza, a city in western Argentina, and to establish a production facility in Tierra del Fuego in the south, which would allow it to take advantage of various tax incentives.
DIRECTV also owns 41% of SKY Mexico and all of Panamericana, a TV service with 3.2 million subscribers that focuses mainly on the western side of the continent, as well as Argentina.
In November, DIRECTV reported Q3 revenue of US$6.03bn, up 10% on the same period in 2009.
Its Latin American subsidiary, DIRECTV Latin America (DTVLA), increased Q3 revenues to US$930m, 22% higher than last year. This was driven by Q3 net additions 206,000, up 27% on Q3 2009.
DTVLA reported continued strong demand for HD, DVR and pre-paid services. Customer promotions aimed at the middle market segment had also produced strong growth, particularly in Brazil, Argentina and Ecuador.
