AT&T (T) to Sell Vrio Operations to Grupo Werthein
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Grupo Werthein and AT&T* (NYSE:T) announced today that Grupo Werthein has reached an agreement to acquire AT&T’s Vrio Corp. business unit. Grupo Werthein is a private holding company that has been doing business in Latin America and internationally for more than 100 years and has extensive experience in telecommunications, finance, insurance, agribusiness and real estate.
Grupo Werthein has agreed to acquire, subject to customary closing conditions, 100% of the equity in Vrio, a leading digital entertainment services company with 10.3 million subscribers1 across 11 countries in Latin America and the Caribbean.2
Vrio provides live and on-demand video services via DIRECTV Latin America, SKY Brasil and DIRECTV GO. Vrio’s best-in-class entertainment includes world-class sporting events, international content and exclusive programming. Vrio 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. DIRECTV GO is an over-the-top (OTT) subscription service that offers online access to a variety of live and on-demand programming in Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, Peru and Uruguay.
“Our vision of the future is to maximize these leading entertainment brands in Latin America, maintaining their leadership and increasing their value proposition by investing in technology and content aligned with the viewing habits of each one of the subscribers, including the next generation of consumers,” said Dario Werthein, shareholder, Grupo Werthein.
Vrio’s infrastructure includes satellites and state-of-the-art broadcast centers that carry 4K video formats. Vrio’s broadband operations, along with other investments, including Torneos y Competencias in Argentina and WIN Sports in Colombia, will transfer to Grupo Werthein at close.
“Vrio has a talented and dedicated team of employees and we look forward to continuing to work with them. We are confident that they will maintain their commitment to business success, customer satisfaction and providing excellent service," added Werthein.
AT&T and Grupo Werthein are committed to a smooth transition and a seamless customer experience. Once the transaction is completed, Vrio subscribers will continue to have access to premium content and can expect the same services, channel lineup, content offerings and customer care experience.
“This transaction will further allow us to sharpen our focus on investing in connectivity for customers,” said Lori Lee – CEO AT&T Latin America. “We remain committed to Latin America through our wireless business in Mexico and services for multinational corporations operating in the region.”
Until closing, all employees will operate business as usual. AT&T and Grupo Werthein expect that when the transaction closes, substantially all employees who support Vrio’s operations today will transition to Grupo Werthein. AT&T and Grupo Werthein will have transition services 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 contemplation of this transaction, 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. The companies expect the transaction to close in early 2022. AT&T plans to announce second-quarter 2021 results on Thursday, July 22, 2021.
Grupo Werthein is represented in the U.S. by Skadden, Arps, Slate, Meagher & Flom, LLP, and as lead Latin America counsel by Bruchou, Fernandez Madero & Lombardi. Goldman Sachs & Co. LLC acted as financial advisor and Sullivan & Cromwell LLP acted as legal advisor to AT&T.
1 As of June 30, 2021 and including OTT subscribers.
2 Vrio’s broadband operations in Colombia and AT&T’s interest in SKY Mexico are not included in the transaction.
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